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Wednesday, May 22, 2013

Bernanke: "We Are The Best-Looking Horse In The Glue Factory"

While the Fed Head may have been joking, his statement that the USA is “the best looking horse in the glue factory” may be the most accurate assessment of the path ahead. And, it's also a sign that Bernanke's imminent retirement from the Fed is an exit strategy well thought out.

While the QE policy has boosted the stock market to rarified levels of overvaluation (the Cyclically Adjusted Price Earnings Ratio (CAPE), also known as Shiller's PE Ratio, is above most previous stock market peaks which have been followed by market crashes), it has done little to stimulate the economy. Bernanke blames Congress and the Obama Administration for pushing through such austerity measures as tax hikes. And, he's right. Bernanke has been standing on the monetary accelerator while the DC bureaucrats have been lying on the brakes. It seems like a good time for Bernanke to retire before the ‘Shumer hits the fan.’

As for what's ahead, Chris Martenson warns that Stocks Likely to Crater from Here — which is probably a gross underestimate of what's coming in the years ahead as the financial system itself collapses.