Tuesday, August 23, 2011

Friday's Much Awaited Fed Speech: Bernanke is Not the Tooth Fairy

Dallas Federal Reserve Bank President Richard Fisher declared yesterdat that Ben Bernanke is "not the tooth fairy,".

The suggestion here is that the Fed chief won't use his widely awaited saviour  speech on Friday to extend new monetary stimulus.

"His job is not to leave presents under the pillow of people who have desires that may not be easily fulfilled,"  "Our job is to put things right in the long term."

Asked about the speech in Jackson Hole, Wyoming, Fisher said "You'll learn when you hear him speak. Ben Bernanke's not the tooth fairy."

"Now they know they can put off an expense because the cost of borrowing will be held at a very low rate for two years,"  "I just think it's not an incentive, it's a disincentive."
Fisher said that the Fed has already given the economy plenty of gas, and that the real reason that the economy is not growing faster than it is is because of "dysfunctional government."

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