TravisV recently posted a comment on this blog with a link to his comment on Scott Sumner’s blog flagging two apparently contradictory rationales for the Fed’s quantitative easing policy in chapter 19 of Ben Bernanke’s new book in which he demurely takes credit for saving Western Civilization. Here are the two quotes from Bernanke:
1 Our goal was to bring down longer-term interest rates, such as the rates on thirty-year mortgages and corporate bonds. If we could do that, we might stimulate spending—on housing and business capital investment, for example…..Similarly, when we bought longer-term Treasury securities, such as a note maturing in ten years, the yields on those securities tended to decline.
2 A new era of monetary policy activism had arrived, and our announcement had powerful effects. Between the day before the meeting and the end of the year, the Dow would rise more than 3,000 points—more than 40…
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Utopia, you are standing in it! 
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