Is Ben Bernanke an Investing Dolt? The Evidence Is In

From Bloomberg today:

Federal Reserve Chairman Ben S. Bernanke renewed a pledge to sustain record stimulus even after the U.S. expansion gains strength, while saying policy makers don’t expect the economy to remain weak through 2015.

“We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens,” Bernanke said today in the text of a speech in Indianapolis. Policy makers’ forecast to hold the main interest rate near zero until at least mid-2015 “doesn’t mean that we expect the economy to be weak through” that year.

Want to bet on Bernanke?

Consider…

From my book Trend Commandments:

In 2005 Bernanke said: “We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think its going to drive the economy too far from its full employment path, though.”

In 2006 Bernanke said: “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

In 2007 Bernanke stated: “At this juncture…the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”

Worse yet? Bernanke told the Senate Banking Committee in March 2011 that he saw little evidence that the stock market was a bubble, but provided certainty with this ditty of a response: “Of course, nobody can know for sure.”

Why again do we care what this man says?

Many investors follow and trust inept leaders implicitly. Are they masochistic? You bet. Investors who believe in Bernanke take pleasure in being abused and dominated. A taste for suffering? Indeed. That’s their thing.

Trend followers on the other hand just want to make money.

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