The man who made his bones about the Great Depression in writing his Princeton thesis is losing his intestinal fortitude. In his paper he summarizes that FDR could have solved the the Great Depression if only they had inflated the currency more.
Today Bernanke back tracks on his own conclusion by stating:
Federal Reserve Chairman Ben S. Bernanke said today that large U.S. budget deficits threaten financial stability and the government can’t continue indefinitely to borrow at the current rate to finance the shortfall.
Even Bill Gross is becoming a skeptic of late telling listeners to diversify away from the U$D before the banks do.
Bill Gross, founder of Pacific Investment Management Co., advised holders of U.S. dollars to diversify before central banks and sovereign wealth funds ultimately do the same amid concern about surging deficits.
All of a sudden these guys are concerned about the growing debt? Wasn't it Bill Gross who said we should buy up these vacant houses and knock 'em down? The cracks are beginning to show in their united front regarding the steps to take to "fix this crises". As Gross goes on to say:
“I think he’ll fail at pulling a balanced rabbit out of a hat,” Gross said from Pimco’s headquarters in Newport Beach, California. “They are talking about -- once the economy in the U.S. renormalizes -- the move back toward balance or much less of a deficit. I suspect that will be hard to do.”
I've gone on the record recently as saying that once down this path the FED and Treasury will not be able to stop their stimuli, because as soon as they do everything will come down around it. These monetary gifts had nothing to do with strengthening our economy and only facilitated the criminal behavior that got us here.
And what do you know ... Bill Gross has finally tapped into his common sense as well.
“Our expectation is the government won’t be able to exit” from those positions, Gross said in an interview on Bloomberg Radio today. The programs “will be semi-permanent positions on their balance sheets.”
Looks like corporate welfare for the connected is here to stay.