Bernanke:Liar Or Fool?

I saw the story first from Dr Duru’s tweet earlier today about Helicopter Ben testifying before congress.

“Gold is out there doing something different from the rest of the commodity group. I don’t fully understand movements in the gold price, but I do feel that there is a lot of uncertainty and anxiety in financial markets right now; and some people believe that holding gold will be a hedge against the fact that they view many other investments as being risky and hard to predict at this point.”

I don’t know about anyone else but, I find it amazing that the guy in charge of the Federal Reserve actually testified that he’s stumped about gold. Is he serious? Or is he playing a game with congress?

I agree with DrDuru as to his thoughts on Helicopter Ben.

So, when gold is just another commodity, Bernanke is confident he understands gold. But when it diverges to the upside and makes new highs, it becomes a conundrum. Bernanke can certainly point to current inflation numbers and insist that buyers of gold are simply “uncertain and anxious.” His claim that other investments appear “risky and hard to predict” to other people is useless.

Bernanke cannot speculate much further on other fundamental reasons for gold’s rising popularity: more and more people are looking into the future and realizing that many Western governments can only afford to pay (service?) their tremendous loads of debt by printing money. Maybe not today or tomorrow, but eventually, the world will be awash in even more massive amounts of paper. This is always an available option in a world of near-zero interest rates.

So either Ben Bernanke is truly lying when he says he doesn’t understand the rise in gold and is a moron and shouldn’t be anywhere’s near the levers of power or he’s just lying through his teeth but won’t say anything as that would be a political bombshell. Neither option sounds good to me.