They don't call him Helicopter Ben for nothing:

Bernanke Hints of Further Rate Cuts

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke on Thursday hinted that another interest rate cut may be needed to bolster the economy. The worsening credit crunch, a deepening housing slump and rising energy prices probably will create some "headwinds for the consumer in the months ahead," he said.

Bernanke said he expects consumer spending will continue to grow and suggested the country can withstand the current problems without falling into a recession. But he indicated that consumers could turn more cautious as they try to cope with all the stresses.

The odds have grown that the country could enter a recession. A sharp cutback in consumer spending could send the economy into a tailspin. Against this backdrop, Fed policymakers will need to be "exceptionally alert and flexible," Bernanke said.

In other words, there should never be a recession. Ever. Even if the fundamentals call for one (to restore housing affordability, a sustainable MEW rate, and undo the excesses created by a bubble). Just keep on printing the money, inflation be damned. Who cares if it's toughest on the poor? It's the asset holding class that must be protected (and that includes all homeowners).

Over at continentaleconomics.com, there is this comment:

Bernanke is a “one-thought-man” and a “I-know-one-big-thing-man”. The one thought that is on the chairman’s mind is that if things tend to go wrong in the financial markets, open the spigots, cut rates, flood the markets; and his “one big idea” is that the Great Depression was caused because the central bank did not flood the markets with liquidity to the full extent back then.

posted by Quiddity at 11/29/2007 05:20:00 PM