Helicopter Ben so, is he any good?
Several years ago, Ben Bernanke earned the nickname “Helicopter Ben” by joking that the Fed would drop Dollars from helicopters if the American economic situation ever became desperate enough to warrant it.
The Fed under Ben Bernanke hasn’t sat on its hands as the financial crisis has unfolded. Bernanke, who took the Fed’s helm in February 2006, just as the crisis was beginning, has been the most activist Fed chief in history — all but guaranteeing that the Fed, like a good soldier, won’t stop firing until all its ammunition is spent.
Ben Bernanke honors his nickname by pledging to do everything in his power to stimulate the flow of money, short of literally dropping Dollars from the sky. Capital markets naturally reacted to this policy prescription with delight, as some of the surplus Dollars will certainly be used to bid up and stock and bond prices. Currency markets, on the other hand, were not so complacent, sending the Dollar back down from the depths from which it only recently emerged. In other words, zero-interest rates and a surfeit of dollars hot off the printing press has analysts and forex traderz wondering aloud about who will be foolish enough to want to own Dollars in the future.
Post Details
Posted on December 23, 2008
at 10:14 am
Written / posted by: Simon
Filed under: Credit Crisis, Currency Trading, News