Pete the Banker: Fed Chair Bernanke in Dangerous Territory

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This is another admission by Bernanke that the Fed is treading in dangerous territory and while the odds may be with them; there exists significant potential that their actions will cause more harm than good.  It seems that both the Fed and the Treasury at this point are really clueless when it comes to the potential results of their actions on the economy.

Look at this from Housing Wire (here):

“Christopher Whalen with Institutional Risk Analytics responded to Bernanke’s Wednesday comments saying, “The FOMC cannot leave rates at current levels or the financial system will collapse. The cost-benefit tipping point on ZIRP has long since been passed.”
 Bernanke, himself, conceded in front of lawmakers Wednesday that further easing may be necessary to breath life into the markets, while also admitting the approach could create unforeseen consequences.
“Our experience with these policies remains relatively limited, and employing them would entail potential risks and costs,” he said. “However, prudent planning requires that we evaluate the efficacy of these and other potential alternatives for deploying additional stimulus if conditions warrant.”

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