The Other McCain

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Ruh-Roh: Bernanke Says Unemployment Won’t Be Back to ‘Normal’ for Five Years

Posted on | December 6, 2010 | 2 Comments

On “60 Minutes” last night:

The nation’s unemployment rate, which has been over 9 percent for a record 19 months, is not likely to return to “a more normal unemployment rate” of about 5 percent or 6 percent for four or five years, the Federal Reserve chairman said in an interview with the CBS News program “60 Minutes” broadcast on Sunday night. . . .
Bernanke said: “Between the peak and the end of last year, we lost eight and a half million jobs. We’ve only gotten about a million of them back so far. And that doesn’t even account the new people coming into the labor force. At the rate we’re going, it could be four, five years before we are back to a more normal unemployment rate. Somewhere in the vicinity of say 5 or 6 percent.”

You know what the weird thing is? You can expect the stock market to go up because of this bad-news remark by Bernanke. Why? Because if Bernanke believes the economy’s in the toilet, it probably means the Fed will keep pumping currency, which means low interest rates for financial institutions, etc.

“They’re trying to re-inflate the bubble,” as an economist buddy remarked to me in May 2009. But it’s not working and at some point, they’re going to have to admit that it’s not working. And he’s your kick-in-the-head economic news of the day:

Gold imports into China have soared this year, turning the country, already the largest bullion miner, into a major overseas buyer for the first time in recent memory.
The surge . . . comes as Chinese investors look for insurance against rising inflation and currency appreciation . . .

Guess they’ve been listening to Glenn Beck.

Category: Economics

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