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It’s always fascinating to watch one dance on the political coals of short term job security. My personal view of the Federal Reserve being completely politicized aside, here are the points that I think matter so far in Bernanke’s prepared remarks/testimony:

  1. He re-introduced the idea of “the long term” (demographics, retirement accounts, Medicaid, social security, etc…)
  2. He amplified the point of market re-regulation becoming a reality
  3. He gave lip service to transparency

Here are my read-throughs on points 1-3:

  1. It’s sad, but enlightening, to hear the Chairman of the Federal Reserve finally consider the TAIL (long term duration)
  2. Re-regulation = higher cost of permanent/socialized capital and tighter access to it = higher interest rates
  3. Transparency in the Feds balance sheet maybe, but there is ZERO transparency in the macro investment process he applies to proactive forecasting

I am tracking Bernanke like bear – the Buck continues to Burn…

KM

Keith R. McCullough
Chief Executive Officer

Bernanke Goes "Long Term" - BernankeBuck