John pointed out yesterday how Ben Bernanke is actually insulting our intelligence with his arguments. If you want to really understand just how dumb the Fed chairman thinks you are, contrast what he’s saying with the following headlines, about a speech given today by Thomas Hoenig, president of the Kansas City Fed:
DJ Hoenig: Fed Needs To Move Away From Crisis Type Monetary Policy
DJ Hoenig: Mkts Would Benefit From Higher Fed Funds Rate
DJ Hoenig: 1% Fed Funds Rate Still Easy Policy
DJ Hoenig: Too-Big-To-Fail Banks Socialist, Not Capitalist
DJ Hoenig: Supports Return Of Modified Glass-Steagall Laws
DJ Hoenig: Fed Is Monetizing Debt Right Now
DJ Hoenig: Current Fed Policy Playing Role In Rising Commodity Prices
You can read the story for yourself here. Hoenig is one of the central bank’s well-known contrarians, and you expect him to say things like this. But still, how big of a contrast is that to what we’re hearing out of Bernanke this week? And who do you think is closer to the truth?
Bernanke has been adamant that the Fed is not monetizing debt, or driving up commodity prices. Think he’d even acknowledge that a 1% fed funds rate is still “easy” monetary policy?