Monday, December 06, 2010

Big Ben Explains Things

A few things that concern me:

Bernanke says that QE is not inflationary, but that he is worried about deflation and won't let it happen....if QE is not inflationary then how can it fight deflation?

I don't believe QE is inflationary, its an asset swap (as Bernanke states). This doesn't mean that others won't believe it is inflationary and push up asset prices as a speculation.

I think the worst quote is when the interviewer asks whether he is able to control things and he said he was "100% confident". Famous last words.

He says the goal is to lower rates, yet doesn't talk about liquidity traps or that QE has not worked in Japan.

Scott Dauenhauer CFP, MSFP, AIF