Ben Bernanke told Congress today that the economy is still pretty shaky, and the Fed will take action if it turns down:
Bernanke said that the Fed could start new purchases of securities….his clearest indication to date that a third round of so-called “quantitative easing” is in the realm of possibility. Another option would be to provide “more explicit guidance” about how long the Fed’s current policy of ultra-low interest rates will remain in place….The Fed chief also said that the central bank could lower the rate it pays banks to park money at the Fed, currently 0.25 percent.
That’s reassuring, I guess. In related news, Cate Long reports that Ron Paul continues to be a gold bug:
Ron Paul to Bernanke: “Is gold money?” Bernanke: “No it’s a precious metal”. Paul: “Why do central banks hold it?” Bernanke: “Tradition.”
Roger that. Time to grow up, Ron.