It was only after the third question from Kevin Brady, the Texas Republican who chairs the joint economic committee in Congress, that Ben Bernanke offered a real hint on when the Federal Reserve might start slowing the money flow to the US economy.

“When do you expect this strategy to begin? What are the benchmarks you’re looking at to begin this process?” Mr Brady said.

The answer from the Fed chairman was that the US central bank was trying to assess whether the progress in the labour market was “real and sustainable”. >> Read More

Ben Bernanke struck a dovish tone in testimony to US Congress on Wednesday, asserting the merits of easy monetary policy and gave no hint that the US Federal Reserve will soon slow down its $85bn-a-month, third round of quantitative easing.

“In the current economic environment, monetary policy is providing significant benefits,” Mr Bernanke told the Joint Economic Committee of Congress.

 Markets are desperate for any information on when the Fed will start to taper down its QE3 asset purchases, but Mr Bernanke said the decision will be driven by incoming economic information.

“In considering whether a recalibration of the pace of its purchases is warranted, the committee will continue to assess the degree of progress made toward its objectives in light of incoming information,” Mr Bernanke said. >> Read More

Here’s the full transcript:

Ben Bernanke has delivered the commencement speech for this year’s graduates of Simon’s Rock, a quirky college in Massachusetts.

 The whole thing is here. It might be the only commencement speech all year to contain footnotes.

The speech is about economics, but rather than discuss the short- or medium-term, he talks about the very long-run, and whether things are likely to change a lot over the next 50 years, and what role technology or innovation will play.

And in doing that, he looks back at some of the amazing changes from the past centuries and decades. >> Read More

Ben Bernanke warned against excessive risk-taking in financial markets on Friday as the dollar was driven up in the latest manifestation of a desperate global hunt for yield.

In a speech in Chicago, the US Federal Reserve chairman said he was watching for signs that banks were resorting to speculation because of low interest rates, highlighting the danger that easy monetary policy could inflate new bubbles in asset prices.

 His comments show how low interest rates have come to dominate global financial markets as waves of monetary easing send investors scurrying around the world for anywhere they can earn a return on their cash. The average yield on lowly rated corporate debt, or junk bonds, this week dipped below 5 per cent to a record low that is less than US Treasury bonds yielded in 2007.

“In light of the current low interest rate environment, we are watching particularly closely for instances of ‘reaching for yield’ and other forms of excessive risk-taking, which may affect asset prices and their relationships with fundamentals,” Mr Bernanke said. >> Read More

US plans to force foreign banks to hold more capital are a threat to harmonious global regulation and risk “a protectionist reaction”, the EU commissioner in charge of financial services has warned.

Michel Barnier told Ben Bernanke, Federal Reserve chairman, that plans to force higher capital requirements on the US subsidiaries of European banks could lead to retaliation against US banks.

In a pointed letter seen by the Financial Times, Mr Barnier argued that the Fed plans are a “radical departure” from past US policy and could hamper the international economic recovery.

He warned that retaliation could “end up with a fragmentation of global banking markets”. >> Read More

Ben Bernanke will not be at the Kansas City Fed’s annual Jackson Hole shindig in late August this year . He has a scheduling conflict. Maybe he’s getting a haircut?

Bernanke, and former Fed chair Alan Greenspan, whom he succeeded in 2006, have periodically used the setting to preview important U.S. central bank actions

Reuters

One of Wall Street’s biggest money managers has called on the Federal Reserve to rein in its programme of quantitative easing, saying its bond-buying tactics are a “large and dull hammer” that have distorted markets and risk stoking inflation.

Rick Rieder, who oversees $763bn in fixed income investments for BlackRock, spoke out as the Fed debates how long to persist with the unorthodox measures it has used to stimulate the US economy. His comments add BlackRock to the growing list of Fed critics who are warning of trouble ahead for the bond market.

BlackRock has been an advocate of government debt in recent years, in comparison to the shrill voices that delivered premature warnings of higher rates. Mr Rieder’s shift comes as the asset manager pushes clients towards investments with less sensitivity to the effect of higher interest rates than long-dated bonds. >> Read More

If the economy is getting better, then why does poverty in America continue to grow so rapidly?  Yes, the stock market has been hitting all-time highs recently, but also the number of Americans living in poverty has now reached a level not seen since the 1960s.  Yes, corporate profits are at levels never seen before, but so is the number of Americans on food stamps.  Yes, housing prices have started to rebound a little bit (especially in wealthy areas), but there are also more than a million public school students in America that are homeless.  That is the first time that has ever happened in U.S. history. 

So should we measure our economic progress by the false stock market bubble that has been inflated by Ben Bernanke’s reckless money printing, or should we measure our economic progress by how the poor and the middle class are doing?  Because if we look at how average Americans are doing these days, then there is not much to be excited about.  In fact, poverty continues to experience explosive growth in the United States and the middle class continues to shrink.  Sadly, the truth is that things are not getting better for most Americans.  With each passing year the level of economic suffering in this country continues to go up, and we haven’t even reached the next major wave of the economic collapse yet.  When that strikes, the level of economic pain in this nation is going to be off the charts.

The following are 21 statistics about the explosive growth of poverty in America that everyone should know…

1 - According to the U.S. Census Bureau, approximately one out of every six Americans is now living in poverty.  The number of Americans living in poverty is now at a level not seen since the 1960s.

2 - When you add in the number of low income Americans it is even more sobering.  According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.

3 - Today, approximately 20 percent of all children in the United States are living in poverty.  Incredibly, a higher percentage of children is living in poverty in America today than was the case back in 1975.

4 - It may be hard to believe, but approximately 57 percent of all children in the United States are currently living in homes that are either considered to be either “low income” or impoverished.

5 - Poverty is the worst in our inner cities.  At this point, 29.2 percent of all African-American households with children are dealing with food insecurity. >> Read More

New Prime Minister Shinzo Abe makes a lot of Japan’s neighbors nervous thanks to his hawkish reputation on security issues. Sure enough, before he was even elected in December he started a war—a currency war, that is, with his pledge to devalue the yen. To judge from some reports this week, Tokyo could even face a currency civil war, as Mr. Abe and members of his cabinet disagree on precisely how far their money should fall.

Pause for a moment, though, to consider exactly what kind of economic war Tokyo may or may not be waging. It’s often said that generals fight the last war—recalibrating their tactics to address the enemies they faced in their previous conflict, whether or not that’s the best strategy to counter a future foe. So it is here. All of the global talk about a currency war misses the ways in which competitive devaluations are yesterday’s war.

First, a definitional point. Mr. Abe isn’t launching a new currency war so much as he’s waging what may be the concluding battle of the last one. Time was when a relatively stable greenback provided a relatively stable foundation on which Asian economies could grow. No longer. As Washington has encouraged the dollar to slide further and further in value, Asia finds its monetary policies on a sandy foundation. >> Read More