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We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

Ben Bernanke

In the future, my communications with the public and with the markets will be entirely through regular and formal channels.
BEN BERNANKE

Communication Formal
Life is amazingly unpredictable; any 22-year-old who thinks they know where they will be in 10 years, much less in 30, is simply lacking imagination.
BEN BERNANKE

Imagination Thinking Years
The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.
BEN BERNANKE

Months Past Risk
Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.
BEN BERNANKE

Depression Financial Great Result
Economics is a very difficult subject. I’ve compared it to trying to learn how to repair a car when the engine is running.
BEN BERNANKE

Car Running Trying
The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.
BEN BERNANKE

Demand Path Risk
The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
BEN BERNANKE

Financial Impact Problem
Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.
BEN BERNANKE

Committee Country Moving
September and October of 2008 was the worst financial crisis in global history, including the Great Depression.
BEN BERNANKE

Financial October September
Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.
BEN BERNANKE

Banking Banks Commercial Investment
The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.
BEN BERNANKE

Chance Guidance Inference
The American people are among the most productive in the world. We have the best technologies. We have – great universities. We have entrepreneurs.
BEN BERNANKE

Entrepreneur People Technology World
Education – lifelong education for everyone – from toddlers to workers well advanced in their careers – is indeed an excellent investment for individuals and society as a whole.
BEN BERNANKE

Career Education Money
The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
BEN BERNANKE

Government Technology Wish
In a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place.
BEN BERNANKE

Best Economic Inflation Resources Way
How much would you pay to avoid a second Depression?
BEN BERNANKE

Borrow Depression Great Pay

We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

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We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

Related Topics

Popular Authors

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