Housing Bubble: In Defense of Bernanke?

Caroline Baum had some interesting comments about Bernanke's testimony before Congress in her writeup What Bernanke Didn't Say About Housing. One of the more interesting exchanges at Ben Bernanke's testimony to the Financial Services Committee today was the one between the Federal Reserve chairman and Representative Scott Garrett, a Republican from New Jersey.     

By John M. Mason: Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System in a speech given at Jackson Hole, Wyoming on Friday defended the record of his tenure in the position he now holds, indicated his belief that the economy is not growing as rapidly as he would like to see it grow, and hinted that further monetary easing might be forthcoming…as early as September.

Paul Krugman is now so far into outer space with ridiculous economic proposals that even Helicopter Ben Bernanke recognizes Krugman's proposals as "reckless". Bloomberg reports Bernanke Takes On Krugman’s Criticism Ignoring Own Advice Federal Reserve Chairman Ben S. Bernanke took on Nobel prize-winning economist Paul Krugman yesterday and called his advice to reduce unemployment by boosting inflation “reckless.”

Several days ago we wrote about what we defined as the Fed's "D-Rate" - the interest rate at which the cash outflows from payments by the Fed on its Excess Reserves will surpass that cash inflows from its asset holdings, a very troubling day because as we further explained, from that point on the Fed would be "printing money just to print money." In other words, with every passing day, the Fed is getting ever closer to the point where the inflation it so very much wishes to unleash will force

Nikhil Raheja submits: During a recent conference with the chairman of the Federal Reserve, Ben Bernanke, it was noted by the chairman that the housing bubble was not caused by low interest rates. In a monthly survey of mainly Wall Street and other business economists, 42 said low interest rates were partly to blame for the housing boom while 12 sided with Mr. Bernanke and said they weren't.

By Joseph E. Gagnon Today, we're fortunate to have Joe Gagnon, senior fellow at the Peterson Institute for International Economics, as a guest contributor.

Edward Harrison submits:Commenting about the recent Wall Street Journal article “Housing rebound in Canada spurs talk of new bubble,” Rolfe Winkler of Reuters says