Buying Time, Bernanke’s Only Choice
With the consumer and bank balance sheets in dire straits, Ben being a student of depressions has no choice but to buy time and hope for a miracle. Low interest rates help two groups, 1) the banks as they can use the cheap money to rebuild or more correctly hold together their balance sheets as the toxic loan situation builds in real estate, and 2) the speculators as they play with the stock and commodity markets. Real people are not benefiting to a large extent so they are expressing their populist BS.
This could go on for a long time as I don’t expect a real recovery until the numbers show capitulation of the speculative mania, probably not before the 2013-2015 period.