Looking over the vast data landscape which the Fed has access to, Chairman Bernanke clearly sees either a darker Bradburian threat as in something evil this way comes, or possibly, a milder threat to which the US economy, in his view, still cannot handle. What is considered timely analytical economic advice, as it is delivered daily and nightly over the TV and the Web, has for some time lamented about just how and when the economy might recover to old form. Stimulus, QE2, and none of the above have been debated endlessly while staring at the available data. But Bernanke has consistently been nervous, almost haunted by the prospects that relevant media advise types have continually missed the dark spot. After all, how relevant is bad advise.
Now maybe it is a case where the Chairman just does not want his picture appearing in history books under the heading, Just Like Hoover, but either way, he looks uncomfortable. Certainly the Fed's actions have increasingly gone from an image of Volcker like strength to a weaker Greenspan to Bernanke picture of weakness as every accommodation has been made to preserve stable equity market conditions supposedly to guarantee future economic strength. But what material difference will QE2 treasury purchases have on employment, consumption, and investments? Feeding the market's psyche and relying on the the greater fool theory to increase general economic health is putting yourself in the hands of equity players, almost two years off the bottom. Nice idea, bad timing. Something is just not right here and Bernanke appears desperate. Again.
