No banker is in right mind would make trillion dollar bets the way Bernanke has. He’s supposed to be guarding against systemic risk, but his actions are amplifying it.
Bernanke is a wonk (studious, hardworking, detail oriented). He thinks that by making a list of risks, he somehow knows what they all are and, after consulting some academic studies by his staff and others, can decide that these risks are manageable:
“the costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant. “
Ha-ha-ha. He’s such a fool. He should be put in a room with $10,000 and made to speculate on one stock at a time. Let’s see how far he gets with his approach. He does not appreciate that which he is entirely blind of and which may hit out of left field and trash all his range-bound thinking. What if Israel attacks Iran? What if Obama dies? What if Russia moves nuclear weapons into an adjacent country? Or stations ballistic missiles in Iran? What if interest rates suddenly rise? What if the EU falls apart? What if a few major banks fail?
And what if he himself is creating a huge bubble in speculative asset prices and doesn’t even realize it?
5:58 pm on September 1, 2012
