Wednesday, June 3, 2009
Bernanke: start work now to curb US budget deficit
Does Bernanke believe that non-governmental (private sector) savings are too high? Wasn't he complaining a couple of years ago that they were too low and we were too dependent on "foreign savings??"
Well, saying, "The government should start to curb the deficit," is the EXACT same thing as saying that the government should take away private sector savings, because that's what it is!
Whatever's on the government side of the ledger is the equal-but-opposite on the private sector side. The fact that Bernanke doesn't realize this is astonishing!
(Go see my chart a few posts back.)
GOVERNMENT DEFICITS ADD TO PRIVATE SECTOR SAVINGS!
ONLY GOV'T CAN BE A NET SUPPLIER OF SAVIGS!
I hope you enjoyed this market rally over the past three months because if the Administration follows Bernanke's advice--and it's likely that they will-kiss the rally goodbye and say, "Hello," to new lows in the market sometime later this year or next year.