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Thursday, February 3, 2011

'The Mystery of the Deviant Bernanke'

Deductive reasoning is pretty much looking at all the facts or clues laid out and making a logical determination based on that information.

Example:  You observe a person at a supermarket purchasing among other items, baby formula, diapers and talcum powder.   You can deduce with a certain reliability that the shopper has a baby to take care of at home or purchased the items for another person who does.

So, to all you Scooby Doos, Shaggies, Daphnies and Thelmas out there- here are the facts to help you solve the fiendish case of...

 The Mystery of the Deviant Bernanke.

Facts:

#1- Official unemployment up currently to 9.5% from 9.4% last month

#2- Unemployment has been 9% & higher for over two full years & counting.

#3- In response, last year Fed Chair Ben Bernanke started Quantitative Easing (and eventually QE-2) under the guise of helping businesses start hiring again.

* We all know this is a complete lie and that the $$ was never intended for that purpose-- that $$ has been spent by the Fed as a means to bailout banks and hyper-inflate Wall St's value, but we'll put that knowledge aside and pretend his intentions were honorable.

So, let's continue..

#4-  According to AP, "Bernanke said it will take "several years" for unemployment to return to more normal levels (four or five years) " and "Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established".   That means 2015-2016 is projected.

#5-  Bernanke was also asked how he'll decide whether more QE is needed after QE2 runs out this summer. His answer: The Fed will decide the same way it always does, by looking at various economic metrics (employment, the output gap, etc.) and decide whether the Fed needs to be more or less accommodative.

So to all at 'Mystery Inc.' what is it you can deduce from the facts provided?

Well-- if the Fed created QE-1 ($900 billion added to national debt) and QE-2 ($600 billion) to combat unemployment (supposedly), and things aren't projected to really be dramatically better until 2015-2016...  And Bernanke believes his policies are the reason we're on the 'right track'...

Then..

Ahh, Yes Super-Sleuths, you got it- expect QE-3 this summer once QE-2 runs out.

Then QE-4 & QE-5...


~ Tomorrow's Mystery:  The Case of the Missing Scooby Snacks

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