Bernanke is hinting that he may not accept another term as Chairman of the Board of Governors.
My prediction: he will decline the nomination. Why? Because his policies have lit the fuse on the dynamite of mass inflation.
The FED cannot sell the $2 trillion in government debt that it bought. The monetary base sits there, like a room filled with explosives. A recovery will light the fuse.
He is a Keynesian. So, he does not understand economic cause and effect. He believes in free lunches. He believes that federal debt is good. He thinks that digits create wealth. But he can see that the FED is trapped. It cannot unwind without causing a depression. Not a recession — a depression.
So, if he leaves in February, when his term is up, he passes on the Old Maid to his successor — the way Greenspan passed it on to him.
He will quit. He will abandon ship. He will escape blame. His successor will take the hit.
Why would anyone accept the slot? Because Keynesians think that kick the can will work for another four years.
Some men seek fame. Economists can rarely get fame. But being the FED Chairman makes you famous. Some dolt will accept the position.
I hope it’s Janet Yellin. She deserves what will happen to her. She has been a yes-woman for Bernanke.
Of course, Paul Krugman would be best. But he is literally terrified of hard questioning. Whoever gets to be the next FED Chair will be questioned harder than any FED Chair in history.