This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Four More Bernankes

NEW YORK ( TheStreet) -- As Ben Bernanke prepares his exit as Federal Reserve chairman, it's clear what his legacy will be.

"Helicopter Ben," as his derisive nickname implies, found a way to effectively deal with economic challenges that defied political leaders, using only monetary policy.

It's an approach that's becoming increasingly popular as central bankers become key to maintaining the economies of all America's biggest trading partners. Instead of calling for four more years, you might call for "Four More Bernankes."

Great Britain, iPath GBP/USD Exchange Rate ETN (GBB), is the most obvious example. Faced with a Conservative government that, like our Republicans, sees austerity as the cure for the economy, the Bank of England plans to assure borrowers that they will have low, low interest rates until their economy improves.

The Bernanke plan in this case is led by Mark Carney, a Canadian given credit for shielding that country from the worst of the Great Recession. Before entering government service in 2004, he was with Goldman Sachs.

While insisting he's no Bernanke, Carney is nevertheless doing a very Bernanke-like thing, coupling interest rates as low as 0.5% with an unemployment target, in this case 7%, as the London Telegraph's live blog attests. The hope, as with the Federal Reserve's QE program, is that low interest rates will spur business activity and hiring.

Meanwhile, in India (INRUSD), Bernanke is named Raghuram Rajan. He's a former IMF economist who warned of the approaching U.S. financial crisis as early as 2003, and the new head of the Reserve Bank of India.

India faces a credit crunch, engineered by Rajan's predecessors through a rise in interest rates. He portrays himself as "pro-growth" and needs to protect the value of the rupee and, as with Bernanke, do things the government itself is unwilling or unable to do, according to the Economic Times of India.

This idea of central banker as superman comes directly from the American experience where price stability is no longer the only goal, but growth and employment also factor into the equation.

Japan, iPath JPY/USD Exchange Rate ETN (JYN), under the Bank of Japan's Haruhito Kuroda, is unique among the group in having a growth-happy political leadership, under Shinzo Abe, who recently won full control of his nation's parliament.

But Kuroda, too, is expected to use monetary policy to offset any mistakes by political leaders, stimulating the economy, and increasing inflation, to reduce the yen's value in the face of a rise in sales tax, as the Japan Times reports.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JYN $45.75 0.22%
GBB $40.28 -0.24%
AAPL $109.44 -1.20%
FB $92.20 -0.22%
GOOG $635.88 -1.00%


Chart of I:DJI
DOW 16,965.17 +52.88 0.31%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,770.8550 -20.2970 -0.42%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs