Ben Bernanke is an American economist and the current chairman of the Federal Reserve. The Federal Reserve is the central bank for the U.S. Bernanke initially became chairmen for the Federal Reserve in 2006, for a four-year term, which was again renewed for another term. Prior to becoming the chairman for the Federal Reserve, he was a member of the Board of Governors of the Federal Reserve System from 2002 to 2005. Before his career in government, Bernanke was a professor at Stanford Graduate School of Business and a tenured professor at Princeton University.
Recently, European Central Bank (ECB) policymaker Jens Weidmann said the strategy of printing money was not the solution to the eurozone crisis. (Source: Carrel, P., “Printing money not the way out of crisis: ECB’s Weidmann,” Yahoo! Finance, November 20, 2013.) Ya, no joke!
Of course, Weidmann was not referring to the Federal Reserve, but to thoughts from within the ECB that perhaps buying assets was another tool to use. He may as well be talking about the Federal Reserve’s quantitative easing strategy, though. I’m sure he’s been looking at the Federal Reserve’s massive money printing and its overall ineffectiveness; he’s likely studying the U.S. situation and realizing that the act of simply printing money is not the end-all for achieving success in rebuilding an economy.
There’s that old saying that you learn from other people’s mistakes—that’s what we have here.
The Federal Reserve continues to balk at stopping the money printing. Current Federal Reserve Chairman Ben Bernanke expressed his disappointment in the recent jobs market readings in a recent speech, saying there were insufficient reasons to stop the quantitative easing.
Five years of quantitative easing by the Federal Reserve and, while it clearly helped the country from a much deeper recession and breakdown, the benefits are stalling.
So I say to Weidmann, fight against the use of quantitative easing via printing money in the eurozone, as it will simply cost the eurozone hundreds of billions of euros and would likely do very little for the economy. The already historically record-low interest rates in the eurozone will suffice.
The same thing should be the case on this side of the Atlantic. … Read More
Recently, a friend called me up and asked for some investment advice. He wondered if he should run for the exits, given the recent run-up in the stock market in what is now a somewhat euphoric investment climate.
My response? Yes and no.
I told my friend to take some profits off the table, but at the same time, he should also ride the stock market higher to what will likely be higher upside moves.
This is something that I have constantly advised during this recent stock market rally.
Hey, why take all of your profits off the table now when there will surely (at least I’m thinking) be more gains to end the year? That is, of course, if the shopping season doesn’t tank and Federal Reserve Chairman Ben Bernanke doesn’t decide to surprise us with tapering. I doubt Ben will be smart enough to taper, but then again, with his stint as the head of the central bank drawing to a close, he may yet give us a surprise.
At this time, it’s all about maximizing your opportunities in the stock market while the easy money is flowing in. In other words, follow Dow theory and ride the ticker tape higher.
Even long-time perennial bear David Rosenberg of Gluskin Sheff appears to be conforming to the mass populous. In an interview with CNBC, Rosenberg seemed the most bullish I have ever seen him towards the stock market over the past decade, when he was constantly telling us stocks were set to fall.
In the interview, Rosenberg went as far as to suggest a stock weighting of just over … Read More