Bernanke Cooking Up Inflation, a Small Business Bailout?
pic credit: the Onion
You can't tell me wages are up without recognizing that we've got a little fire going on the funny money side of things.
Federal Reserve Chairman Ben S. Bernanke said rising wages will probably spur household spending in the next few quarters, even as weak job gains drag down consumer confidence.
While the U.S. has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Bernanke said today in a speech in Charleston, South Carolina. “We are maintaining strong monetary policy support for the recovery,” he said in response to an audience question, without discussing any further action the Fed could take to aid growth.
Without specifically saying as much, Bernanke has pretty much committed the Fed's full financial testicular fortitude towards saving small business since the banks - full on all the free money - are still unwilling or unable to lend. Of course, we all know they can't lend even if they wanted to because the minute that free money hits the open air it turns inflationary and God forbid Bernanke have to tackle that monster as well.
Like financial conditions generally, the state of the U.S. banking system has also improved significantly since the worst of the crisis. Loss rates on most types of loans seem to be peaking, and, in the aggregate, bank capital ratios have risen to new highs. However, many banks continue to have a large volume of troubled loans, and bank lending standards remain tight. With credit demand weak and with banks writing down problem credits, bank loans outstanding have continued to decline. Small businesses, which depend importantly on bank credit, have been particularly hard hit by restrictive lending standards. At the Federal Reserve, we have been working to facilitate the flow of funds to creditworthy small businesses. Along with the other banking supervisors, we have emphasized to banks and examiners that lenders should do all they can to meet the needs of creditworthy borrowers, including small businesses. We also have conducted extensive training of our bank examiners, with the message that lending to viable small businesses is good for the safety and soundness of our banking system as well as for our economy. We will continue to monitor bank lending and to seek feedback from banks and borrowers.
The full text of Zimbabwe Ben's remarks to the Annual Meeting of the Southern Legislative Conference of the Council of State Governments in South Carolina may be found via the Board of Governors here.
Anyone else find it cute when the pusher starts complaining about the crackhead's excessive drug use?