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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.

-Ben Bernanke

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There's No Denying That

Ben Bernanke

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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.

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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.

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

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.

The Federal Reserve Is Not Currently Forecasting A Recession.

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

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The Federal Reserve Will Not Monetize The Debt.

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How Much Would You Pay To Avoid A Second Depression?

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

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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.

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

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

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

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

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.

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 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.

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

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

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

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

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.

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

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.

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.

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

The Economic Repercussions Of A Stock Market Crash Depend Less On The Severity Of The Crash Itself Than On The Response Of Economic Policymakers, Particularly Central Bankers.

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

The Fed Is Totally Open.

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

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

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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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.

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

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