Ben Bernanke’s speech today is nothing that is market moving. He talks about the sluggish recovery and gives his opinions of the reasons why. He is happy with 2% inflation per year over the past 3 years even though average hourly earnings are up about 1.7% on average during this time (which is the part he doesn’t acknowledge). He goes on to mention the fiscal issues of the US and its potential drag on economic activity. He also cites Europe and its issues. He gave no hint of how he plans to handle the expiration of OT as he’ll likely wait until the FOMC meeting in Dec. Be sure we’ll see QE4. Bottom line, I find his speech of little importance as the factors he cites as headwinds to economic growth are just symptoms of the deeper problem which Fed policy has only helped to perpetuate, that being TOO MUCH DEBT. Fed policy remains predicated solely on the belief that the only way out of the current lackluster recovery is to just borrow more money at the government, corporate and consumer levels so we can somehow grow out of the ashes of the previous debt induced bubble driven by the Fed.
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