US Outlook if/when Bernake retires?

[Branny]

Hopefully this isn't out of order.

I read today that Obama noted on a recent interview that Bernake was ready to step down or otherwise not continue to be the federal reserve chairman here in the US - http://hosted.ap.org/dynamic/stories/U/US_OBAMA_BERNANKE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-06-18-11-53-05

With a little bit of digging , it seems that Janet Yellen is on tap to replace him. I'm curious about what impacts this could have on bitcoin and the markets as a whole. She has stated in a few reports I've dug up that she does not want the US to go the way of Japan with low interest rates which lead to stagflation. It could be a good sign for longer term US economics, however there would be a huge shock if the US went from the artificially low interest rate we have now to real market rates (4% to 6%)

[CurbsideProphet]

Not going to happen.  Banks feel entitled to cheap money now, it will be incredibly difficult to wean them off.  

http://www.flickr.com/photos/expd/7177571788/lightbox/

[worldinacoin]

Mr Money Printer aka Helicopter Ben will be sorely missed.  Besides him who else will be helping to print out money in such quantities?   I guess the markets will start to panic when he leaves.   

[herzmeister]

meet the new boss, same as old boss

[ScaryHash]

The big banks have already hedged for this event, bought the appropriate stooges, and will continue to make money hand over fist.

Note that the market may dive and swoon, go sideways, or go up. But, it won't matter, because the small investor will get raped, and the banks will make money anyway.

Meanwhile, the value of the dollar will continue to go down, you will pay more at the pump, pay more for groceries, etc.

Same old song and dance.

[Lethn]

The federal reserve is a private central bank, do your research folks, nothing will change as long as currency is in the hands of private interests, this is why everyone is beginning to like Bitcoin so much.

[worldinacoin]

The faces may change, the policies will remain the same just under some new names

[wdmw]

She is considered the 'dovest' of the Federal Open Market Committee, thinks inflation is good and of no concern, and wants to focus on the Fed's unemployment mandate.  So, more cheap money and bad policy.

[notme]

  2:06 PM FOMC Economic Projections: 2013 GDP growth estimate is cut a hair to 2.3-2.6% from 2.3-2.8%, but is boosted in 2014 to 3-3.5% from 2.9-3.4%. The unemployment rate forecast for 2013 is trimmed to 7.2-7.3% from 7.3-7.5% and in 2014 to 6.5-6.8% from 6.7-7%. 14 out of 19 FOMC members see rate hikes beginning in 2015 (4 see hikes before then). [U.S. Economy, Breaking News, Top Stories]

  2:01 PM FOMC Announcement: No changes to the $85B per month in asset purchases and the committee stands ready to increase or decrease the level as necessary. Downside risks to the economy and the labor market have diminished since the fall. [Breaking News, Top Stories, U.S. Economy]

[halfawake]

Sooner or later they're going to have to jack up the interest rates or risk rampant inflation.  Right now, I think the Fed is still far more worried about unemployment than inflation, but it's bound to happen eventually.  I'm kind of surprised he's still buying assets at such a rapid rate, personally.

[notme]

Sooner or later they're going to have to jack up the interest rates or risk rampant inflation.  Right now, I think the Fed is still far more worried about unemployment than inflation, but it's bound to happen eventually.  I'm kind of surprised he's still buying assets at such a rapid rate, personally.

If they let the housing market fall to fundamental levels many more people will lose their homes.  But with the world's stock markets rolling over they will have to make some tough choices soon.

[halfawake]

Sooner or later they're going to have to jack up the interest rates or risk rampant inflation.  Right now, I think the Fed is still far more worried about unemployment than inflation, but it's bound to happen eventually.  I'm kind of surprised he's still buying assets at such a rapid rate, personally.

If they let the housing market fall to fundamental levels many more people will lose their homes.  But with the world's stock markets rolling over they will have to make some tough choices soon.

Fall?  The housing market is already picking up quite a bit.  But yes, you're right that a lot of that may very well be due to the dirt cheap interest rates.  3.5% is almost unheard of, even 5% would be relatively cheap historically. 

But I don't think the Feds really care that much about the housing market.  Maybe it's just me, but there are several things that could have been done to improve the housing market that aren't that complicated.  But yeah, it'd involve things like marking people's mortgages down to the actual property value and the bank would be forced to take a loss on it.  That's really what it comes down to, the banks have more clout than the millions of underwater homeowners.  I saw a post in our weekly newspaper where they were talking about an eminent domain idea where the city would come in, seize the property, sell it back and market value to the original owner so that they wouldn't be paying grossly inflated prices.  Sadly, it never got off the ground.  It'd really be a win win for everyone - except, of course, the banks which sold this whole song and dance to begin with.

[xavier]

It's really simple. Once they start QE, there is no way of stopping. As soon as they stop, a recession starts again. There is a feedback loop. It's a no brainier that they continue with QE, ramping it up compared to before.

[johnyj]

From marketwatch

"high-profile investor Jim Rogers says bonds everywhere are in a bubble, and the pop is coming.

In an interview with Fusion MarketSite a day prior, Rogers says the timing on that bubble is tough, of course.

    “But at some point, markets won’t take central bank policies anymore, and interest rates go up regardless of how much bond buying they do. Market timing is tough. As for the fixed income market, I’m short junk bonds. In any market, the marginal stuff goes first. This could precede problems with sovereign debt.” "

Greenspan inflated the housing bubble, and Bernake inflated the bond bubble, at each step, they just delayed the unavoidable and pushed it to a much higher scale  

[legitnick]

Everything is going to be the same when he leaves

[halfawake]

From marketwatch

"high-profile investor Jim Rogers says bonds everywhere are in a bubble, and the pop is coming.

In an interview with Fusion MarketSite a day prior, Rogers says the timing on that bubble is tough, of course.

    “But at some point, markets won’t take central bank policies anymore, and interest rates go up regardless of how much bond buying they do. Market timing is tough. As for the fixed income market, I’m short junk bonds. In any market, the marginal stuff goes first. This could precede problems with sovereign debt.” "

Greenspan inflated the housing bubble, and Bernake inflated the bond bubble, at each step, they just delayed the unavoidable and pushed it to a much higher scale  

Thanks for the reminder, I really need to dump my bond fund.

[worldinacoin]

Every minute he talks my shares goes down!  He better leave, it will be good for all.

[xavier]

Who is worse? Bernanke or Greenspan?

[Cranky4u]

Once the US pops I predict one of two scenarios;

1. The US crash brings the world into a global depression much like the great depression of last century, or

2. The US crashes to whcih China, Russia and OPEC switch from Petro/US to Petro/Gold. This puts US into a long term sprialling depression, Europe goes into a 3 year recession and Asia + Russia slow but hold firm.

In both scenarios, enough populance move some wealth out of their home nation through the BTC pathway which pushes BTC prices up exponentially for the next 3~5 years.

[Factory]

meet the new boss, same as old boss

This is accurate.