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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (65634)	7/9/2006 12:16:47 AM
From: skinowski	Read Replies (2) \| Respond to of 110194

IMO Bernanke still wants to pop Greenspan's bubbles ASAP Why do you think so?

To: ild who wrote (65634)	7/9/2006 11:06:40 AM
From: gregor_us	Read Replies (1) \| Respond to of 110194

The Line We're Going to hear From Treasury This Week is that the economy is throwing off tax reciepts, and that the Deficits are getting under control. When Paulson joined the Bush Team, I conjectured what his campaign might be. I figured his only option was a pro-growth campaign, in which he would say "we will grow our way out of the imbalances." That's exactly what we're getting from Treasury now. Assistant Treasury Scty Warshawsky: The Jobs report was a terrific report and there's no inflation worries whatsoever. bloomberg.com Warshawsky Bio: whitehouse.gov This makes me think Bernanke is going to highlight rising tax receipts and "getting the deficits undercontrol" week after next in the Humphrey-Hawkins appearance. I expect him to talk about imbalances moving towards "balances", and I think he'll use this as more cover to pause in August. We are already getting repeated chatter from the White House that inflation pressure is muted. Here's what the playbook is for the next two weeks: 1. Treasury will be out in force this week selling deficit reduction, and muted inflationary pressures. 2. Bernanke will echo Treasury the following week in his Hump-Hawkins. BTW, Ild, I see zero evidence that Bernanke has any desire to pop bubbles, or that they are Alan Greenspan's bubbles. They are Ben Bernanke's bubbles because he was a member of the Greenspan FED, and the Chairman of the White House Econ Advisors. I'm not sure why so many people think Bernanke is separate and distinct from the Greenspan era. (Where does this idea come from, and why do so many people accept it?) On the contrary, he like Greenspan is an integral part of a FED that has ratified and supported the Bush Fiscal agenda. From the Tax Cuts of 2001 which Greenspan ratified, to continuation of guns and butter spending which Bernanke supported and continues to support. The Bubble that Bernanke supports now is the Bush bubble of government debt creation. Separately in Bernanke's academic writings, and in his closest collegues, like Alan Blinder (who got Ben the job at Princeton) I find a highly modern view towwards deficits, debts, and monetary policy. Certainly nothing that smacks of old line Bundesbank thinking. Finally, I really don't know what Bernanke wants to do right now, right here at this juncture. I do know this: It was clear several years ago that he was Greenspan's Boy at the FED, he comes directly from the White House to his current job, and he has said not one single clear thing about the supernova creation of govt debt. That speaks volumes to me. Best, Gregor