Bernanke: U.S. Risks Having Millions of Unemployed For Many Years

Bernnake in Frankfurt: “Globally, both growth and trade are unbalanced,” “Because a strong expansion in the emerging-market economies will ultimately depend on a recovery in the more advanced economies, this pattern of two-speed growth might very well be resolved in favor of slow growth for everyone if the recovery in the advanced economies falls short.”

He commented on “large, systemically important countries with persistent current-account surpluses.”

"Countries that undervalue their currencies may eventually inhibit growth around the world and risk financial instability at home"

But isn't that what the U.S is doing with QEs?

Bernanke added  that “sense of common purpose has waned” “Tensions among nations over economic policies have emerged and intensified, potentially threatening our ability to find global solutions to global problems,”.

“further disinflation could hinder the recovery,”

“Insufficiently supportive policies in the advanced economies could undermine the recovery not only in those economies, but for the world as a whole,”.

“On its current economic trajectory the United States runs the risk of seeing millions of workers unemployed or underemployed for many years,”“As a society, we should find that outcome unacceptable.”

Bloomberg: "Bernanke, a scholar of the Great Depression, drew a comparison between the current period and events leading to the 1930s economic disaster. The U.S. and France maintained “persistently undervalued” exchange rates by preventing inflows of gold from feeding into money supplies, which created deflationary pressures in other countries and helped bring on the Depression, Bernanke said".

"preventing inflows of gold from feeding into money supplies"? We have to think about this one.

“Although the parallels are certainly far from perfect, and I am certainly not predicting a new Depression, some of the lessons from that grim period are applicable today,” “In particular, for large, systemically important countries with persistent current-account surpluses, the pursuit of export-led growth cannot ultimately succeed if the implications of that strategy for global growth and stability are not taken into account.”