August 28th 2011 – Down the Jackson Hole…and other adventures in Wonderland

Ben has uttered, but do you remember the days when we hung on the every word that Alan Greenspan spoke? Sad bastard that I am I used to print out his speeches and inwardly ingest…They were always seven A4 pages long and, whilst the sound bite that the world’s press reported on was on page one, the real message was at the end of page seven…long after the MSMs (main stream media) attention span had given up the ghost.

The Bernanke is somewhat less voluble than the former Master of the Universe so he has only begat six pages in his latest diatribe. However… page six says it all.

Finally, and perhaps most challenging, the country would be well served by a better process for making fiscal decisions.

    The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses.

Although details would have to be negotiated, fiscal policymakers could consider developing a more effective process that sets clear and transparent budget goals, together with budget mechanisms to establish the credibility of those goals. Of course, formal budget goals and mechanisms do not replace the need for fiscal policymakers to make the difficult choices that are needed to put the country’s fiscal house in order, which means that public understanding of and support for the goals of fiscal policy are crucial.

I have never been a fan of the Bernanke’s Keynesian economics but has he ever hit the nail on the head? “US Gov get your act together!” Play politics and you will burn in hell. A bunch of kids “praying” in their own paradise..

So where now? Another telling comment referred to the problems in Europe.

I have confidence that our European colleagues fully appreciate what is at stake in the difficult issues they are now confronting and that, over time, they will take all necessary and appropriate steps to address those issues effectively and comprehensively.

Oh dear…now he is back in Wonderland…he has 50 states to bring with him…they all speak Coca Cola and Big Mac…but in Europe 27 countries all speak very different languages…and they will be the final arbiter of judgement day despite what the US of A thinks or does…regrettably… and seemingly they haven’t thought through what happens next.