Zimbabwe Ben, Our Sartre

"My colleagues and I believe that accomodative policies will likely be warranted for an extended period. At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road. ... We are confident we have the necessary tools to withdraw policy accommodation, when that becomes appropriate, in a smooth and timely manner. ... However, reserves likely would remain quite high for several years unless additional policies are undertaken. Even if our balance sheet stays large for a while, we have two broad means of tightening monetary policy at the appropriate time: paying interest on reserve balances and taking various actions that reduce the stock of reserves. ... Overall, the [Fed] has many effective tools to tighten monetary policy when the economic outlook requires us to do so. As my colleagues and I have stated, however, economic conditions are not likely to warrant tighter monetary policy for an extended period", Ben Bernanke at the WSJ, 21 July 2009, link:

http://online.wsj.com/article/SB10001424052970203946904574300050657897992.html.

"[Fed] Chairman Ben Bernanke took his 'exit strategy' on the road yesterday, promising that he knows how to withdraw excess liquidity from the system in time to avoid a new inflation or another asset bubble. We're glad to hear it, but then few doubted that the Fed knows how to exit. The issue is whether he and his fellow Governors have the nerve to do it. ... Mr. Bernanke was far less reassuring on the more potent questions of whether and when the Fed will reduce its balance sheet. ... The Fed's current policy is the easiest in its history and continues even as the financial panic has subsided and the big banks are again making money", original italics, Editorial at the WSJ, 22 July 2009, link: http://online.wsj.com/article/SB10001424052970203946904574302524030510570.html.

Zimbabwe Ben (ZB), who needs no introduction, says virtually nothing in this piece except tighter monetary policy will come in, drumroll please, 2109. Why Sartre? This piece was titled, "The Fed's Exit Strategy". My answer: No Exit. Junior at Junior Deputy has a 21 July 2009 post on ZB's article, link:

http://www.jrdeputyaccountant.com/2009/07/bernanke-on-elusive-fed-exit-strategy.html. Ed Harrison at Naked Capitalism, also commented on ZB's piece, http://www.nakedcapitalism.com/2009/07/bernanke-outlines-feds-easy-money-exit.html. Mike Shedlock's 21 July 2009 comments at Mish's are here: http://globaleconomicanalysis.blogspot.com/2009/07/at-long-last-fed-explains-exit-strategy.html. I learned decades ago to ignore anything a Fedhead says. Now take your exit: GOLD!

I agree with the WSJ.