Original version: http://www.youtube.com/watch?v=h2iTPPpnMXM
Interviewer: Chairman Bernankey, you are printing money, aren't you?
Ben: Not really. The amount of money is not as important as the amount times the speed
with which people spend it.
Interv: You mean the velocity of money.
Ben: Exactly. If people are spending freely and running up the balance on their charge cards,
like they did before the recent crash, then this creates more money velocity and we have to
remove money from the system so that we don't have inflation.
Interv: You mean that you worry about inflation?
Ben: Obviously we do. But right now inflation is present in economies which are growing
rapidly like China, India and Brazil.
Interv: So, what are you going to do about the inflation in China?
Ben: Chinese inflation has to be addressed by Chinese Bankers and we should not try to fight
it because we do not have inflation in the U. S.
Interv: Wait a minute. Oil is up close to 90 dollars per barrel. Gasoline prices are creaping
up in America. Isn't that inflation here in the US?
Ben: Not really because oil is going up due to its usage in China. Usage in the US is actually
down. Our economy isn't overheating, but perhaps China's is.
Interv: So, why are you so certain that you can stimulate the economy now and prevent
inflation in the future.
Ben: What we do is different than previous attempts to stabilize the economy. In earlier times,
we used economic theory and our educated instinct to tell us what to do with the discount
interest rate. It turns out that economics is not intuitive at all.
Check Charlie Gasparino's take on it:
http://www.dailymarkets.com/economy/2010/11/17/why-mocking-bernanke-is-bad-for-america/
Next
Interviewer: Chairman Bernankey, you are printing money, aren't you?
Ben: Not really. The amount of money is not as important as the amount times the speed
with which people spend it.
Interv: You mean the velocity of money.
Ben: Exactly. If people are spending freely and running up the balance on their charge cards,
like they did before the recent crash, then this creates more money velocity and we have to
remove money from the system so that we don't have inflation.
Interv: You mean that you worry about inflation?
Ben: Obviously we do. But right now inflation is present in economies which are growing
rapidly like China, India and Brazil.
Interv: So, what are you going to do about the inflation in China?
Ben: Chinese inflation has to be addressed by Chinese Bankers and we should not try to fight
it because we do not have inflation in the U. S.
Interv: Wait a minute. Oil is up close to 90 dollars per barrel. Gasoline prices are creaping
up in America. Isn't that inflation here in the US?
Ben: Not really because oil is going up due to its usage in China. Usage in the US is actually
down. Our economy isn't overheating, but perhaps China's is.
Interv: So, why are you so certain that you can stimulate the economy now and prevent
inflation in the future.
Ben: What we do is different than previous attempts to stabilize the economy. In earlier times,
we used economic theory and our educated instinct to tell us what to do with the discount
interest rate. It turns out that economics is not intuitive at all.
Check Charlie Gasparino's take on it:
http://www.dailymarkets.com/economy/2010/11/17/why-mocking-bernanke-is-bad-for-america/
Next
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