Tuesday, February 24, 2009

Bernanke: Recovery Will Take Years

Federal Reserve Chairman Ben Bernanke said he's hoping the recession could end later this year, but he cautioned that a full economic recovery will take "more than two or three years."

The head of the central bank said a turnaround will only occur "if actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability." He also acknowledged there's significant risks to the downside for the economy this year.

read the CNN story

My thoughts: Much of the blame belongs on Bernanke. When the Fed started cutting rates in September 2007, they laid the foundation for major economic troubles. They failed to prevent the necessary market corrections from happening. They caused much more malinvestment to be injected into the economy. When inflation finally rears its head (2011-2013), people will have fogetten the insane monetary policy pursued by Bernanke. The next recession will make this one look extremely mild in comparison. Thanks, Ben.

It could take 15-20 years for the Dow to hit 14,000 again.

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