Bernanke Plans to Quit Before the Fed’s House of Cards Falls
July 29th, 2013
For years now, the Federal Reserve has been juicing the economy with quantitative easing, and Bernanke and his cohorts are now toying with the idea of ending the program if a set of arbitrary economic indicators are met, a move that would push interest rates up sharply. Investors have been put on notice that this could happen as soon as the end of the year, though it also may not, and both outcomes could lead to different types of disastrous consequences.
Will the Fed jerk rates up on banks, freezing credit markets during the holiday shopping season and causing a recession? If the central bank chooses not to, will investors fear inflation and rush to commodities, thus crushing the dollar? Ben Bernanke apparently doesn’t want to find out, because the word on the streets is that he plans to quit his job as Chairman of the Federal Reserve on January 31st of 2014, allowing him to quietly slip out of the exit right before the consequences of his fiscal mistakes become apparent to the general public.
Obama Plans to Name Bernanke’s Successor in the Fall
The Obama administration will announce Bernanke’s successor in the fall of this year. So far, a few names have been mentioned as possible replacements, including Larry Summers, failed Treasury Secretary Tim Geithner, and Fed Vice Chairman Janet Yellen, who often advocated for more aggressive easing techniques than Bernanke could even stomach. There are also some distant cries for Paul Volcker to serve as the new chair, though his selection seems less likely given the easy money philosophy shared by most Obama administration ideologues.
Ironically, Obama’s choice of Fed chairman may itself influence how the markets unwind as quantitative easing unravels. The program may end soon and cause a deflationary recession, and, if it does not, inflation will rattle the economy in an unprecedented way. Ben Bernanke’s disastrous policies have the US economy playing chicken with two possible catastrophes, and his plan is to jump ship before the consequences become apparent to the American people.
Expect Year-End Economic Chaos
Since Bernanke set the end of the year as the benchmark for when the quantitative easing program would be reassessed, one should expect that it either will end or the markets will react by pricing in inflation if it does not. The fact that Bernanke seems ready to quit his job the following month implies that he fears being blamed for the pain and suffering that could be kicking in right around that time.
As we stand at the edge of a true fiscal cliff, it’s important to consider how harmful central banking is to the economy. The best way to get out of this mess would be to end legal tender laws and open up free competition in currency. In order to create such a political climate, people must understand the importance of sound money. Since the typical voter is confused by the jargon-laced issue that is monetary policy, entertaining films like Silver Circle provide a way for people to learn about the dangers of the Federal Reserve in a fun and compelling format. Share the Silver Circle iTunes link with friends to help combat the forces of financial tyranny with education and entertainment!
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