Bernanke: "We have lost control"

[jeffrey]

Several months ago, economist David Hale had a private meeting with Federal Reserve Chairman Ben Bernanke, who was trying to ward off a recession by lowering interest rates and increasing the money supply in the economy.

The problem with that approach is that the value of the dollar plunged against foreign currencies, causing crude oil prices to skyrocket because oil is pegged to the dollar. It affected food prices, gasoline and family budgets.

"Ben, you are playing a very unique role in world economic history," Hale recalled telling Bernanke, an expert in the Great Depression. "You are the first central bank governor of the United States to preside over a recession with no decline in commodity prices."

Bernanke could hypothetically limit inflation in commodities by raising interest rates, a policy that would restrict the flow of money but potentially lead to an avalanche of bank failures. At a financial conference in Florida on Tuesday, Hale, a Chicago-based economist for investment managers, hedge funds and multinational companies, paraphrased the Fed chairman's response.

"We have lost control," said Hale, quoting Bernanke. "We cannot stabilize the dollar. We cannot control commodity prices..."



Economist recounts talk with Fed chairman -- chicagotribune.com

[tripods68]

This doesn't really bodes well in the American public confidence and the entire financial system, when the Head of the Federal Reserve DON'T HAVE A CLUE whats going on. Do something already get a hold of yourself.

[sweeps]

Hearsay.

I don't think Bernanke could admit to himself that he has lost control, let alone admit to someone else.