Seeing an article with this title, you would guess this is another bad news blog. But it's truly scary when this article is in Barrons. The article asks whether Ben B is truly clueless or whether he is just pretending to be confident. I would think the latter.
The Fed has talked hawkish too many times and been dovish in action. At some point, the market may lose total confidence in Fed. So while being honest may mean a drop in short term, it's going to build confidence in the fed.
http://online.barrons.com/article/SB119465234453288545.html?mod=googlenews_barrons
...and seemingly not have a clue about what's happening to the economy, let
alone what, if anything, to do about it.At one point or another, he ventured that the economy would soldier on, if somewhat slowly for the next few quarters, unless, he cautioned at another point, it didn't; that inflation was a threat, but not a reality, at least not yet. And that the economy was perking along, nicely negotiating the shocks of the housing collapse, even as evidence to the contrary -- plunging consumer confidence, weak retail sales, dragging auto demand and all the grisly et ceteras -- mounted as he spoke.
All things considered, a Clueless Ben, we suppose, is preferable to an Easy Al, but incorrigible optimist that we are, we had hoped for something better. It's always possible, to be sure, that Mr. Bernanke knows more than he lets on. Certainly, the way the Fed has been opening the monetary spigot suggests that he may entertain greater anxiety than he's willing to exhibit publicly. Which may be effective in keeping the natives from getting restive, but it doesn't exactly enhance his credibility.
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