The Chairman on 60 Minutes

The WealthCycles Staff

For an institution as historically secretive as the U.S. Federal Reserve, having the Chairman do an interview back in 2009 was startling. Fortunes are made and lost on the Federal Reserve Chairman’s words. CNBC used to believe they could predict interest rate changes based on the varying thickness of former Fed Chair Alan Greenspan’s briefcase—something they called the Briefcase Indicator. If he had a thick briefcase, interest rates would undoubtedly change, but if he had a thin briefcase, interest rates would stay put. Greenspan later admitted that his choice of briefcase was only influenced by his decision to bring a sack lunch or not.

Nonetheless, Fed-watchers dissect and deconstruct the Chairman’s words to no end, hoping that they can glean some profit-making insight. As a result, Federal Reserve Chairmen historically have given very few interviews. March 2009 marked the first mass-media interview of a Fed Chair in years.     

“When I called and proposed this interview about a year ago, your representative laughed out loud. And said, ‘The Fed chairman never does an interview.’ Why are you doing this?" 60 Minutes’ Scott Pelley asked.

“Well, it's an extraordinary time. It's an extraordinary time. This is a chance for me, I think, to talk to America directly,” Bernanke said.

When Bernanke first appeared on 60 Minutes in early March 2009, America was in the throes of a massive recession. February’s unemployment rate, which had just been released, had reached 8.1%. And while Congress languished, arguing over politics and policy, Bernanke threw cash at the problem.

“You've been printing money?” 60 Minutes interviewer Scott Pelley asked Bernanke back in March 2009.

“Well… effectively,” Bernanke responded. “And we need to do that, because our economy is very weak, and inflation is very low. When the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation.”

Bernanke got another chance to explain Fed policies on 60 Minutes, making his second appearance on the show Sunday evening, Dec. 5.  

A lot has changed between March 2009 and today. The latest unemployment report printed an official 9.8% unemployment rate, meaning there are 2.56 million more unemployed than when Bernanke last appeared on the show. Gas prices have risen from $1.91 to $2.86, nearly a 50% jump.

Yet Bernanke and the Fed still cling to the ideas that the recession is over and inflation is nonexistent. And in direct contrast to his “effectively printing money” line from 2009, Bernanke goes to great length to emphasize that the Fed is not “printing money.”

“One myth that's out there is that what we're doing is printing money,” he said on Sunday’s program. “We're not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we're doing is lowering interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So the trick is to find the appropriate moment when to begin to unwind this policy. And that's what we're gonna do.”

In one particularly tense moment during the interview, Scot Pelley asks Bernanke if the Fed is worried about inflation and whether or not it has the power to rein in inflation.

Pelley: “Can you act quickly enough to prevent inflation from getting out of control?”

Bernanke: “We could raise interest rates in 15 minutes if we have to. So there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now.”

Pelley: “You have what degree of confidence in your ability to control this?”

Bernanke: “One hundred percent.”

It’s amazing that Bernanke can offer the American people his 100% confidence in the Fed’s ability to fend off inflation when he and the Fed completely missed the Financial Crisis of 2008, underestimated the problems in subprime housing loans, and failed to monitor the banks they supposedly regulated. 

Bernanke’s vote of confidence doesn’t mean a whole lot these days, and people in the United States and abroad are beginning to open their eyes to what the Fed is really doing and the potential consequences to individual security and the global economy. As the real-world economy struggles, Bernanke seems trapped in an imaginary “Fed World,” where excess currency doesn’t cause inflation, cheap and easy credit doesn’t cause bubbles, and all our problems will be solved if only consumers will continue buying new iPods and flat screen TVs.

The Fed will never tell the truth.They are doing this to assured Americans who are not educated about the subject that they are doing the right thing.And that is probably about 90% of Americans listening to them..The Feb and their rich friends has one ultimate plan and that is to crash the dollar,bring down the government secretly as they always do and they will take over from there by ruling the world with the NEW WORLD ORDER agenda....Don't believe me,Just wait and see...

What I found funny about Bernankes' speech is that he wants complete control over the US but not be liable for any crisis the US goes through. He says that they couldn't see the crash of 08 ( that everyone one else saw ) and then he says that they want more power and nothing is their fault?? HA! Is this guy for real?

Bernanke is clearly delusional. Up until now, the powers that be could easily convince the majority of Americans to believe their lies and time continued on. The reality is we have come full circle and for those who can see, we have discovered one can no longer raise interest rates as he suggests because the interest on the debt will explode. His lies have becomed exposed as they leave his mouth.

We are nearing the end of the tunnel and we are going to find a train coming full speed ahead with the light turned off. Better get ready.

Buy Silver Crash JPM.

Were does Bernanke live? Disneyland.....

Great blog Mike! I keep up with it daily, so thank you.

I watched 60 Minutes yesterday and watched the interview. To me, it just seemed like Bernake was terrified or nervous throughout the interview. Seemed like he had cottonmouth the whole time and his lips were quivering when he was talking. I don't believe a word that guy says, especially this 100% confident non sense. I hope people are smart enough to not gain confidence from this interview. For me, it just makes me less confident in the Fed!

Bookmark and Share

Related Content