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Investment Banks Manage To Go Bankrupt Through Their Investment-banking Activities, Commercial Banks Manage To Go Bankrupt Through Their Commercial-banking Activities.

-Ben Bernanke

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Investment Banks Manage To

Ben Bernanke

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Investment Banks Manage To Go Bankrupt Through Their Investment-banking Activities, Commercial Banks Manage To Go Bankrupt Through Their Commercial-banking Activities.

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Commercial Banks

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A Money-financed Tax Cut Is Essentially Equivalent To Milton Friedman's Famous 'helicopter Drop' Of Money.

The Central Bank Needs To Be Able To Make Policy Without Short Term Political Concerns.

Indeed, In General, Healthy Investment Returns Cannot Be Sustained In A Weak Economy, And Of Course It Is Difficult To Save For Retirement Or Other Goals Without The Income From A Job.

A Collapse In U.s. Stock Prices Certainly Would Cause A Lot Of White Knuckles On Wall Street. But What Effect Would It Have On The Broader U.s. Economy? If Wall Street Crashes, Does Main Street Follow? Not Necessarily.

If Your Uniform Isn't Dirty, You Haven't Been In The Game.

I Think One Of The Lessons Of The Depression - And This Is Something That Franklin Roosevelt Demonstrated - Was That When Orthodoxy Fails, Then You Need To Try New Things. And He Was Very Willing To Try Unorthodox Approaches When The Orthodox Approach Had Shown That It Was Not Adequate.

It Is Not The Responsibility Of The Federal Bank - Nor Would It Be Appropriate - To Protect Lenders And Investors From The Consequences Of Their Decisions

The Financial Crisis Appears To Be Mostly Behind Us, And The Economy Seems To Have Stabilized And Is Expanding Again.

Education - Lifelong Education For Everyone - From Toddlers To Workers Well Advanced In Their Careers - Is Indeed An Excellent Investment For Individuals And Society As A Whole.

Under A Cold Turkey Strategy, At Each Policy Meeting The Federal Open Market Committee Would Make Its Best Guess About Where It Ultimately Wants The Funds Rate To Be And Would Move To That Rate In A Single Step.

It Must Be Awfully Frustrating To Get A Small Raise At Work And Then Have It All Eaten By A Higher Cost Of Commuting.

Given The Central Role Of Effective, Firmwide Risk Management In Maintaining Strong Financial Institutions, It Is Clear That Supervisors Must Redouble Their Efforts To Help Organizations Improve Their Risk-management Practices...we Are Also Considering The Need For Additional Or Revised Supervisory Guidance Regarding Various Aspects Of Risk Management, Including Further Emphasis On The Need For An Enterprise-wide Perspective When Assessing Risk.

It's True That The Federal Reserve Faces A Lot Of Political Pressure And Is Unpopular In Many Circles.

I And Others Were Mistaken Early On In Saying That The Subprime Crisis Would Be Contained. The Causal Relationship Between The Housing Problem And The Broad Financial System Was Very Complex And Difficult To Predict.

If I Am Confirmed, I Am Confident That My Colleagues On The Federal Open Market Committee And I Will Maintain The Focus On Long-term Price Stability As Monetary Policy's Greatest Contribution To General Economic Prosperity And Maximum Employment.

The Sources Of Deflation Are Not A Mystery. Deflation Is In Almost All Cases A Side Effect Of A Collapse Of Aggregate Demand.. A Drop In Spending So Severe That Producers Must Cut Prices On An Ongoing Basis In Order To Find Buyers.

Weaker Currencies Abroad Mean A Strong Dollar, And A Stronger Dollar, Together With A Weak Global Environment, Is A Drag On The U.s. Economy. So It's Important, As It Affects Overall Levels Of Production And Employment In The U.s. There Are Many Domestic Industries Doing Well In The United States, Notwithstanding A Strong Dollar.

In The Future, My Communications With The Public And With The Markets Will Be Entirely Through Regular And Formal Channels.

I Think That Having Good Data, Good Statistics-and The United States Generally Has Better Macroeconomic Statistics Than Most Countries-and Having Good Economists To Interpret Those Data And Present The Policy Alternatives, Has A Substantially Beneficial Effect On Policymaking In The United States.

Although Low Inflation Is Generally Good, Inflation That Is Too Low Can Pose Risks To The Economy - Especially When The Economy Is Struggling.

[virtual Currencies] May Hold Long-term Promise, Particularly If The Innovations Promote A Faster, More Secure And More Efficient Payment System.

I'd Throw Dollars Out Of Helicopters If I Had To, To Stimulate The Economy.

Nobody Likes To Fail But Failure Is An Essential Part Of Life And Of Learning. If Your Uniform Isn't Dirty, You Haven't Been In The Game.

Monetary Policy Cannot Do Much About Long-run Growth, All We Can Try To Do Is To Try To Smooth Out Periods Where The Economy Is Depressed Because Of Lack Of Demand

A Gold Standard Doesn't Imply Stability In The Prices Of The Goods And Services That People Buy Every Day, It Implies A Stability In The Price Of Gold Itself.

If You Want To Understand Geology, Study Earthquakes. If You Want To Understand The Economy, Study The Depression.

I Generally Leave The Details Of Fiscal Programs To The Administration And Congress. That's Really Their Area Of Authority And Responsibility, And I Don't Think It's Appropriate For Me To Second Guess.

It's The Price Of Success: People Start To Think You're Omnipotent.

Price Of Success

September And October Of 2008 Was The Worst Financial Crisis In Global History, Including The Great Depression.

Not All Information Is Beneficial.

If Current Trends Continue, The Typical U.s. Worker Will Be Considerably More Productive Several Decades From Now. Thus, One Might Argue That Letting Future Generations Bear The Burden Of Population Aging Is Appropriate, As They Will Likely Be Richer Than We Are Even Taking That Burden Into Account.

Over The Years, The U.s. Economy Has Shown A Remarkable Ability To Absorb Shocks Of All Kinds, To Recover, And To Continue To Grow. Flexible And Efficient Markets For Labor And Capital, An Entrepreneurial Tradition, And A General Willingness To Tolerate And Even Embrace Technological And Economic Change All Contribute To This Resiliency.

A Meritocracy Is A System In Which The People Who Are The Luckiest In Their Health And Genetic Endowment; Luckiest In Terms Of Family Support, Encouragement And, Probably, Income; Luckiest In Their Educational And Career Opportunities; And Luckiest In So Many Other Ways Difficult To Enumerate - These Are The Folks Who Reap The Largest Rewards.

The Gses Are Adequately Capitalized. They Are In No Danger Of Failing.

Monetary Policy Is Not A Panacea.

Monetary Policy

I Don't Think That Chinese Ownership Of U.s. Assets Is So Large As To Put Our Country At Risk Economically.

I Don't Fully Understand Movements In The Gold Price.

The Risk Exists That, With Aggregate Demand Exhibiting Considerable Momentum, Output Could Overshoot Its Sustainable Path, Leading Ultimately In The Absence Of Countervailing Monetary Policy Action To Further Upward Pressure On Inflation.

In Fact, The World Needs More Nerds.

Importantly, In The 1930s, In The Great Depression, The Federal Reserve, Despite Its Mandate, Was Quite Passive And, As A Result, Financial Crisis Became Very Severe, Lasted Essentially From 1929 To 1933.

Great Depression

The More Important Reason Is That The Research Itself Provides An Important Long-run Perspective On The Issues That We Face On A Day-to-day Basis.

The People Who Best Use Their Advantages, Or Overcome Adversity, And Work Honestly Are Those Most Worthy Of Admiration.

Like Gold, U.s. Dollars Have Value Only To The Extent That They Are Strictly Limited In Supply. But The U.s. Government Has A Technology, Called A Printing Press (or, Today, Its Electronic Equivalent), That Allows It To Produce As Many U.s. Dollars As It Wishes At Essentially No Cost. By Increasing The Number Of U.s. Dollars In Circulation, Or Even By Credibly Threatening To Do So, The U.s. Government Can Also Reduce The Value Of A Dollar In Terms Of Goods And Services, Which Is Equivalent To Raising The Prices In Dollars Of Those Goods And Services.

The Federal Reserve Is Not Currently Forecasting A Recession.

Federal Reserve

Nobody Really Understands Gold Prices And I Don't Pretend To Understand Them Either.

If You Are Not Happy With Yourself, Even The Loftiest Achievements Won't Bring You Much Satisfaction.

There's No Denying That A Collapse In Stock Prices Today Would Pose Serious Macroeconomic Challenges For The United States. Consumer Spending Would Slow, And The U.s. Economy Would Become Less Of A Magnet For Foreign Investors. Economic Growth, Which In Any Case Has Recently Been At Unsustainable Levels, Would Decline Somewhat. History Proves, However, That A Smart Central Bank Can Protect The Economy And The Financial Sector From The Nastier Side Effects Of A Stock Market Collapse.

The Crisis In Europe Has Affected The Us Economy By Acting As A Drag On Our Exports, Weighing On Business And Consumer Confidence And Pressuring Us Financial Markets And Institutions.

The Lesson Of History Is That You Do Not Get A Sustained Economic Recovery As Long As The Financial System Is In Crisis.

I Don't See Much Evidence Of An Equity Bubble.

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Life Is Amazingly Unpredictable; Any 22-year-old Who Thinks They Know Where They Will Be In 10 Years, Much Less In 30, Is Simply Lacking Imagination.

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House Prices Have Risen By Nearly 25 Percent Over The Past Two Years. Although Speculative Activity Has Increased In Some Areas, At A National Level These Price Increases Largely Reflect Strong Economic Fundamentals.

I Served Seven Years As The Chair Of The Princeton Economics Department Where I Had Responsibility For Major Policy Decisions, Such As Whether To Serve Bagels Or Doughnuts At The Department Coffee Hour.

One Might As Well Try To Perform Brain Surgery With A Sledgehammer.

Every Effort Needs To Be Made To Try And Offset The Costs Of Katrina And Rita By Reductions In Other Government Programs, Especially Those That Are Wasteful, Duplicative And Ineffective.

The Impact On The Broader Economy And Financial Markets Of The Problems In The Subprime Markets Seems Likely To Be Contained.

The Fed Is Totally Open.

The Federal Reserve Will Not Monetize The Debt.

Federal Reserve

The More Guidance A Central Bank Can Provide The Public About How Policy Is Likely To Evolve The Greater The Chance That Market Participants Will Make Appropriate Inferences.

Economics Is A Very Difficult Subject. I've Compared It To Trying To Learn How To Repair A Car When The Engine Is Running.

Developments In Financial Markets Can Have Broad Economic Effects Felt By Many Outside The Markets.

The Economist John Maynard Keynes Said That In The Long Run, We Are All Dead. If He Were Around Today He Might Say That, In The Long Run, We Are All On Social Security And Medicare.

Economics Is A Highly Sophisticated Field Of Thought That Is Superb At Explaining To Policymakers Precisely Why The Choices They Made In The Past Were Wrong. About The Future, Not So Much.

Inflation Is Certainly Low And Stable And, Measured In Unemployment And Labour-market Slack, The Economy Has Made A Lot Of Progress. The Pace Of Growth Is Disappointingly Slow, Mostly Because Productivity Growth Has Been Very Slow, Which Is Not Really Something Amenable To Monetary Policy. It Comes From Changes In Technology, Changes In Worker Skills And A Variety Of Other Things, But Not Monetary Policy, In Particular.

With Respect To Their Safety, Derivatives, For The Most Part, Are Traded Among Very Sophisticated Financial Institutions And Individuals Who Have Considerable Incentive To Understand Them And To Use Them Properly.

The Basic Prescription For Preventing Deflation Is Therefore Straightforward, At Least In Principle: Use Monetary And Fiscal Policy As Needed To Support Aggregate Spending, In A Manner As Nearly Consistent As Possible With Full Utilization Of Economic Resources And Low And Stable Inflation. In Other Words, The Best Way To Get Out Of Trouble Is Not To Get Into It In The First Place.

Speaking As Somebody Who Has Been Happily Married For 35 Years, I Can't Imagine Any Choice More Consequential For A Lifelong Journey Than The Choice Of A Traveling Companion.

The Best Approach Here, If At All Possible, Is To Use Supervisory And Regulatory Methods To Restrain Undue Risk-taking And To Make Sure The System Is Resilient In Case An Asset-price Bubble Bursts In The Future.

I Assure This Committee That, If I Am Confirmed, I Will Be Strictly Independent Of All Political Influences... Essential To That Institution's Ability To Function Effectively And Achieve Its Mandated Objectives.

Over The Years, The U.s. Economy Has Shown A Remarkable Ability To Absorb Shocks Of All Kinds, To Recover, And To Continue To Grow.

The U.s. Government Has A Technology, Called A Printing Press (or, Today, Its Electronic Equivalent), That Allows It To Produce As Many U.s. Dollars As It Wishes At Essentially No Cost.

The Risk That The Economy Has Entered A Substantial Downturn Appears To Have Diminished Over The Past Month Or So.

We’ve Never Had A Decline In House Prices On A Nationwide Basis. So, What I Think What Is More Likely Is That House Prices Will Slow, Maybe Stabilize, Might Slow Consumption Spending A Bit. I Don’t Think It’s Going To Drive The Economy Too Far From Its Full Employment Path, Though.

...the Federal Reserve Has The Capacity To Operate In Domestic Money Markets To Maintain Interest Rates At A Level Consistent With Our Economic Goals

The American People Are Among The Most Productive In The World. We Have The Best Technologies. We Have - Great Universities. We Have Entrepreneurs.

While Rising Delinquencies And Foreclosures Will Continue To Weigh Heavily On The Housing Market This Year, It Will Not Cripple The U.s.

We Do Not Expect Significant Spillovers From The Subprime Market To The Rest Of The Economy Or To The Financial System.

Achieving Price Stability Is Not Only Important In Itself, It Is Also Central To Attaining The Federal Reserve's Other Mandate Objectives Of Maximum Sustainable Employment And Moderate Long-term Interest Rates.

How Much Would You Pay To Avoid A Second Depression?

Great Depression

The Amount Of Currency In Circulation Is Not Changing. The Money Supply Is Not Changing In Any Significant Way.

If Wall Street Crashes, Does Main Street Follow? Not Necessarily.

I Am Very Proud Of My Nerd-dom.

The Crisis And Recession Have Led To Very Low Interest Rates, It Is True, But These Events Have Also Destroyed Jobs, Hamstrung Economic Growth And Led To Sharp Declines In The Values Of Many Homes And Businesses.

I Am Confident That We Will Meet Whatever Challenges The Future May Bring.

I Come From Main Street, From A Small Town That's Really Depressed.

Under Current Law, On January 1, 2013, There's Going To Be A Massive Fiscal Cliff Of Large Spending Cuts And Tax Increases.

It Takes About Two And A Half Percent Growth Just To Keep Unemployment Stable.

Investment Banks Manage To Go Bankrupt Through Their Investment-banking Activities, Commercial Banks Manage To Go Bankrupt Through Their Commercial-banking Activities.

Commercial Banks

If You Are Asking Me If I Would Advocate That The Chinese Go To Greater Flexibility In Their Exchange Rate, I Certainly Would.

Among The Largest Banks, The Capital Ratios Remain Good And I Don’t Expect Any Serious Problems . . . . Among The Large, Internationally Active Banks That Make Up A Very Substantial Part Of Our Banking System.

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