Armageddon ’08 © (that’s mine), Hope ’09 © (mine too), Flash Crash ™, Congressional Debt Squabble ™, Euro Crisis ™, i2K12 © (mine, and despite QE-lite we’re still waiting, Gary) Greek Austerity ™ and now… the Fiscal Cliff ™.
I have to tell you I hate this latest one. Seriously, it’s annoying because it seems to have come on like gangbusters when everybody knew it was there so many months ago. I myself made personal preparations for it back in the spring. It’s as if the noise waited until the election was over (sorry, no buzz phrase for that one). I guess our attention span can only handle one hype fest at a time.
Anyway, here’s MarketWatch with a wrap up of Ben’s speech.
He urged the members of Congress not to kick the can down the road.
Looming in the background is the need for Congress to pass another increase in the federal debt ceiling, now set at $16.4 trillion.
Fractious talks between the two sides in the summer of 2011 over an increase in the debt limit disrupted financial markets and the economy, Bernanke said.
“A failure to reach a timely agreement this time around could impose even heavier economic and financial costs,” Bernanke said.
The Treasury Department said that the government will come close to the ceiling by the end of the year. Special accounting techniques can then delay hitting the ceiling for a few more months.
“Coming together to find fiscal solutions will not be easy, but the stakes are high,” Bernanke said.
Is he saying to come together and agree on how to increase the debt limit (kick the can) or is he advocating actual cutting so that we live within our means? I am curious. Thus far congress has raised the limit and the Fed has sopped up bonds that result from this debt.
Is this all an exercise in following verbal breadcrumbs? Where is the value at the end of the trail? I don’t even really know what he is saying. He says don’t kick the can but he is promoting can kicking by monetizing debt. Is that not true?