“Ben Bernanke is leaving the Fed at the end of the year. The leading candidates to replace him are all fully committed to continuing his policies, which consist of providing as much credit rope as you need to hang yourself. People come to think what they need to think when they need to think it. When they approach the ‘end of their rope’ phase of a financial catastrophe they need to believe that they have no choice but to play out a little more line. Doubts give way to desperate faith. Reflection is abandoned for action. All of the announced candidates for Bernanke’s job – Yellen, Summers and Kohn – are believers.”
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