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It is not the responsibility of the Federal Bank – nor would it be appropriate – to protect lenders and investors from the consequences of their decisions

Ben Bernanke

The GSEs are adequately capitalized. They are in no danger of failing.
BEN BERNANKE

Capitalized Danger Failing
In fact, the world needs more nerds.
BEN BERNANKE

Needs Nerd World
The amount of currency in circulation is not changing. The money supply is not changing in any significant way.
BEN BERNANKE

Currency Significant Way
I’d throw dollars out of helicopters if I had to, to stimulate the economy.
BEN BERNANKE

Dollars Economy Helicopters
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 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
I and others were mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.
BEN BERNANKE

Casual Financial Problem Relationship
Weaker currencies abroad mean a strong dollar, and a stronger dollar, together with a weak global environment, is a drag on the U.S. econom.
BEN BERNANKE

Important Mean Strong
The more important reason is that the research itself provides an important long-run perspective on the issues that we face on a day-to-day basis.
BEN BERNANKE

Issues Perspective Running
How much would you pay to avoid a second Depression?
BEN BERNANKE

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

Financial October September
The best approach here, if at all possible, is to use supervisory and regulatory methods to restrain undue risk-taking and to make sure the system is resilient in case an asset-price bubble bursts in the future.
BEN BERNANKE

Investing Risk Use
A gold standard doesn’t imply stability in the prices of the goods and services that people buy every day, it implies a stability in the price of gold itself.
BEN BERNANKE

Gold People Standard
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
We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s going to drive the economy too far from its full employment path, though.
BEN BERNANKE

Employment House Thinking
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

It is not the responsibility of the Federal Bank – nor would it be appropriate – to protect lenders and investors from the consequences of their decisions

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It is not the responsibility of the Federal Bank – nor would it be appropriate – to protect lenders and investors from the consequences of their decisions

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