After today’s Jackson Hole circus, I officially do not care about Ben Bernanke. He is dead to me for the rest of his time at the Federal Reserve.
And he should be dead to you, too.
It’s not because of enmity toward the Fed chairman. I think he’s a smart guy and means well; I don’t pretend I could have done a better job during the worst crisis since the Great Depression — though admittedly, Bernanke should not avoid partial blame for being complicit in the easy-money regime of Greenspan.
No, my beef isn’t based on policies. It’s based on that fact that he’s just … well, useless.
In September 2011, I wrote a column about how the Fed simply won’t matter until 2013 thanks to the unlikelihood of QE3, a clear long-term vision of ZIRP though mid-2013 and a lack of other effective tools to make an impact.
The narrative a year later remains exactly the same.
Any more quantitative easing is hard to justify thanks to mixed economic data that signals hope as much as alarm, a significant rally in the stock market year-to-date and a persistently hostile political environment to any QE3 overtures.
The zero-interest-rate policy will persist since the employment portion of the dual mandate continues to trump the Fed’s inflation obligations. It’s difficult to find evidence of runaway inflation due to monetary policies — sorry, but an uptick in corn thanks to the Midwest drought doesn’t count.
And all those distractions, like Operation Twist? Give me a break.
So Bernanke officially is useless — and I’m done with him.
Besides, his term is up in 2014. If he even makes it that long, since Mitt Romney apparently wants to give him the boot.
All you pundits out there who love to put QE3 in headlines can keep writing a story every 10 days about how more quantitative easing is on the way. Look, I’ll even give you the appropriate Bernanke sound bite from the Jackson Hole meet-up:
“Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”
Thrilling, isn’t it? Let’s twist up the sound bite and read into it, maybe with a headline about QE3 being “imminent” instead of just “possible.”
Also, this excerpt that “a balanced reading of the evidence supports the conclusion that central bank securities purchases have provided meaningful support to the economic recovery while mitigating deflationary risks.” (Get the entire boring-ass text of his speech here.)
Come on, guys. Nobody in their right mind is investing based on this vague doublespeak. You think the rally of 12% so far this year to put the S&P at multi-year highs above 1,400 is predicated wholly on the promise of impending QE3?
Please. Don’t flatter Bernanke by believing he has that much power.
Instead, focus on what really matters right now — the rise in corporate profits but stagnation of top-line growth, or the looming fiscal cliff showdown.
You have more important things to do than sit around and watch Bernanke say and do nothing.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.
