Alan passes troubled Baton to Bernanke
I’m going to try and keep it short today, as it’s my anniversary and my wife will kill me if I stay too long.
Anyway, much change happened today. Borrowing rates were increased a 14th time as Alan passed his troubled baton to the Helicopter man. How will Ben Bernanke fare? If history sets precedent, Bernanke should be worried.
Stephen Roach has this to say about the issue:
History points to a difficult handover. The October 1987 stock-market crash came shortly after Greenspan succeeded Paul Volcker at the Fed. In 1979 Volcker faced problems of inflation and bond-market turbulence when he took over from G William Miller.
“When Greenspan leaves he will take his papers, but he will also take the confidence the markets have built in him,” said Roach. “I think Bernanke will be tested by the markets.
I’ve previously stated that I see numerous problems on the horizon. Which of these do you think, if any, will present Ben Bernanke with a crisis of his own?
(1) Enormous U.S. Trade Deficit
(2) Massive U.S. Debt
(3) Severe Oil supply issues on the horizon
(4) Housing Bubble
(5) Corporate Bankruptcies & Bond Market Problems
(6) Stock Market Bubble
(7) Derivatives Bubble
(8) Tremendous Consumer Debt, Negative savings rate and consumer pullback
(10) Continuing Loss of Jobs/Outsourcing
(11) Loss of Central Bank confidence & dollar crisis
(12) Pension Crisis (look at PBGC)
Are there other issues that I missed? What are your thoughts on the matter