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Romney’s plan to dump Bernanke sparking anxiety on Wall Street
Mitt Romney’s promise to replace Federal Reserve Chairman Ben Bernanke if elected president is stirring anxiety among some financial analysts — who fear such a move could send the nation’s markets tumbling.
Romney, throughout his White House campaign, has argued he knows what needs to be done to get the economy running at full steam.
But the concern among market watchers is that if Romney dumps Bernanke, whose term expires at the beginning of 2014, he would remove the person who some believe is the weak economy’s primary lifeline.
“There’s a view that the economy cannot sustain itself, that it’s really the Fed that is fueling economic growth, and that a post-Bernanke Fed is just not as favorable to growth,” said Brian Gardner, senior vice president of Washington research at Keefe, Bruyette and Woods.
Gardner wrote in a note to clients Thursday that a Romney win could lead to a market decline, operating on the premise that Bernanke’s vow of long-term economic stimulus would then be short-lived.
The Fed chairman has not won any friends among Republicans for his efforts to boost the economy, which have included three rounds of “quantitative easing.”
The massive bond purchases have sent stock markets soaring, but conservatives fret that the Fed’s rapidly-expanding portfolio is going to be a nightmare to unwind and could result in severe inflation.
Bernanke’s Fed agreed in September to buy $40 billion of mortgage bonds a month, and to continue doing so even after the labor market picks up the pace.
The Fed has also stated it expects to keep interest rates near zero until mid-2015.
But a Romney win could throw those plans into question, and signal to markets that the days of easy money are dwindling.
Unslung Hero
October 15th, 2012
Most don’t know that the “Federal Reserve” is NOT part of the Federal government, but is a private concern. Most people don’t know that the President can only pick from the cadidates that the Fed itself puts forth………It is a FIXED game folks!!!
Tim
October 15th, 2012
“… really the Fed that is fueling economic growth …”
What growth?
“The Market” is plundering the Treasury with Bernanke’s assistance through devaluation.
Lies, More Lies, and Damned Lies.
Twellsy
October 15th, 2012
The Fed also hated it when Ron Paul was running. I don’t agree with 95% of what Paul says, but audit the Fed? All for it.
dba_vagabond_trader
October 15th, 2012
In that case, avg investors had better get their money out of the market and gird their loins. Fixing this 52%er induced mess is going to be painful and we better deal with it.
eternal cracker p
October 15th, 2012
If you agree printing money = growth.
If you can’t count past 3. QE-Infinity (open-ended money printing, or “QE-3″) simply means they don’t want to ever announce QE-4.
Stirrin the B.S.
October 15th, 2012
The only growth that has been occurring is in the bottom line of the Wall Street investment firms.
At near zero percent interest, investors have no choice but to invest in the markets (or precious metals).
Discontinue Bernake’s inflationary monetary policy and interest rates will rise and capital will move out of the market and into interest bearing vehicles.
It will take smart leadership and a lot of luck to balance the combination of rising interest rates, rising inflation and economic growth. No wonder the markets will get spooked.
I find it interesting that the markets are already reacting to a Romney win – down 300 points since the first debate.
BILL
October 15th, 2012
“promise to replace Federal Reserve Chairman Ben Bernanke”
screw that !
End the Fed !
Pickled Liver
October 15th, 2012
Maybe it’s time the Wall Streeters loose their cash cow and suck it up like the rest of us!
even steven
October 15th, 2012
Bernanke has helped set the stage for hyper-inflation. He’s a complete disaster, and we’ll be paying a heavy price for his incompetence years after he’s gone.
Rick
October 15th, 2012
dba_vagabond_trader, I bailed out a week after the market peaked.
All my precious metals investments are in machined steel, copper, lead and brass.
GM Car Of The Future
October 15th, 2012
I’m sick and tired of earning .08 cents on my Savings Account each month. It costs my bank 3x that to mail me my Statement each month.
pissedpatriot30
October 15th, 2012
Why would he announce that? What purpose does it serve….? Anyone????
FabianNightmare
October 15th, 2012
I agree with Bill……end the Fed Reserve….give the Treasury Dept back its original mandate.
At the rate they are printing fiat paper, there really is not any reason to continue the concept of income taxes, accept that it is now used to control and coerce the citizens. Print money based upon a percentage of GDP and that is all the Gov can work with for a given year. No more general revenue bonds and notes, only specific bonds paid for by the revenue generated off of the specific project.
Keyser Söze
October 15th, 2012
U.S. Supreme Court
Legal Tender Cases, 110 U.S. 421 (1884)
Legal Tender Cases
Submitted January 22, 1884
Decided March 3, 1884
110 U.S. 421
MR. JUSTICE FIELD, dissenting.
“From the decision of the Court I see only evil likely to follow. There have been times within the memory of all of us when the legal tender notes of the United States were not exchangeable for more than one-half of their nominal value. The possibility of such depreciation will always attend paper money. This inborn infirmity no mere legislative declaration can cure. If Congress has the power to make the notes a legal tender and to pass as money or its equivalent, why should not a sufficient amount be issued to pay the bonds of the United States as they nature? Why pay interest on the millions of dollars of bonds now due when Congress can in one day make the money to pay the principal? And why should there be any restraint upon unlimited appropriations by the government for all imaginary schemes of public improvement if the printing press can furnish the money.”
The Doktor
October 15th, 2012
A financial person that I have listened to for many years, Bob Brinker, has said on many occasions that appointing Ben Bernanke to the Fed was a wise choice. I’d like to know a lot more about Romney’s goals with the Fed.