Bernanke takes the US Federal Reserve Defence on "60 minutes
03:45
zhbjzhql
, Posted in
WASHINGTON - Federal Reserve Chairman Ben Bernanke intensifies its defence $ 600 billion plan binding of Council of Treasury-purchase the Federal Reserve, say that the economy still struggling to become "standalone" without the assistance of the Government.
In an interview recorded with "60 minutes CBS" aired on Sunday night, Bernanke also argued that the Congress should not cut spending or raise taxes given the fragility of the economy remains.
The high life Barbara Corcoran today takes a look on how far 400,000 State places $ go to United States 12 essential toy hits Christmas past ConsumerMan: shopping holiday tips to save Black Friday money winnings, but consumers are still nerveThe President of the Federal Reserve said think another recession is unlikely. But he warned that the economy may undergo a slowdown in high unemployment dampens consumer spending.
Interview is part of a large counter-offensive Bernanke leads against critics of the plan purchase link the US Federal Reserve announced on 3 November. The purchases are intended to lower rates of interest in the long term, to raise the stock price and encourage more spending to stimulate the economy.
Criticism from Republicans in Congress of the US Federal Reserve officials say they fear that intervention the Fed could stimulate inflation and speculative on Wall Street purchases while doing not much of the economy.
Other issues of "60 minutes", Bernanke interview:
A sustained unemployment would have been much higher-"something as it is in depression, 25 percent"-had the Fed not provided special assistance to Wall Street firms, banks and other companies to facilitate a credit crunch. Said it could take four or five years more unemployment, to 9.8% in the fall to a historically normal 5% or 6%. A reiterated that the Fed is ready to buy even more than 600 billion in bonds of the Treasury Board for eight months, if it decides that the economy has need fuel to lower interest rates. Sustained A risk of inflation is an exaggeration. Bernanke has said he is "100 %" confident that the Fed will be able to push inflation, when the time is right, by increasing interest rates and the conduct of its exciting programs. Called the risk of deflation - a decrease in prices, wages and extended values of stocks and houses - "pretty weak". He said that likely would have been already if the Fed did not maintain super-low interest rates. Urged A Congress in order to improve the nation's tax code "closing the gaps and decreasing rates" for individuals and businesses. He said so doing create a greater incentive for people to invest.In the interview with no material be broadcast CAs, but was later posted online in the form of video, Bernanke reiterated his opinion that artificially low Chinese currency is "bad for u.s. economic" because it hurts our trade
It is not useful for China, which, he said, because it makes it more difficult for managers of Beijing policies keep China's economy and inflation, overheating.
Critics fear that binding of the Federal Reserve purchases are increasing inflation risks have complained that purchases mean that the Fed is, indeed, printing more money. In the interview, Bernanke called that a "myth." He stressed the Fed does not print money when buying Treasurys and said the program expand the amount of money in circulation "significantly."
History: Yes, the economy is doing stable earnings, but...Lou Crandall, Wrightson ICAP Chief Economist said that Bernanke is just that purchases the Fed does alter significantly the amount of money circulating in the economy. This is mainly because banks are not ready for most of the money they already hold in reserve. When the Fed buy Treasurys, it increases reserves in the banking system. These reserves actually "creating" money, banks would they lend.
Yet, Crandall suggested that bond purchase programme creates the appearance of money printing, something which could establish the credibility of the Central Bank into play.
Appearance Bernanke Sunday evening is part of a Flash of public relations, that it is mounted since the reserve US Federal announced program on 3 November. Private and public appearances, Bernanke has sought to explain and defend the regular programme Americans, investors and regulators on Capitol Hill.
History: Bernanke, Geithner: take punched against criticsHis efforts have included an op - Ed article in the Washington Post and discussions with students in Jacksonville, Florida, economists Jekyll Island, GA, businessmen in Columbus, Ohio, Governors of the Central European banks and members of the Banking Commission of the Senate.
Criticism comes from home and abroad. Responsible for China, Germany, Brazil and others said that the Fed is a scheme to u.s. exporters a competitive advantage by keeping the value of the weak dollar. Weak dollar makes goods less expensive u.s. products abroad and more expensive foreign to the United States.
It is rare for a Fed Chairman to give an interview for broadcast or print session. But it was Bernanke's second appearance on "60 minutes." His first was in March 2009. At that time, he knows the anger on Wall Street orchestrated and rising anxiety about the economy.
History: Actions put in place a strong DecemberIn an interview broadcast Sunday, Bernanke pointed out that the economy is growing at an annual rate of approximately 2.5% - too slow to reduce unemployment. For a self-sustaining recovery, consumers and businesses should spend more, so the economy could grow faster.
Bernanke said he hoped that binding of the Federal Reserve purchase program will allow to lift stock price. This is partly because the decline in the yields of bonds would cause some people to move money into stocks.
Stock prices would increase wealth and trust of individuals and businesses. Expenditure increase lifting revenues, profits and economic growth. Bernanke has referred to this as a "virtuous cycle".
History: The greatest feeble-minded CEO 2010But when asked at the interview if the recovery is autonomous, Bernanke responded: "it may not be." It is very close to the border. ?
In view of the still-low economic growth, he said: "We are not very far from being the level where the economy is not self-sufficient."
Copyright 2010 the Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
