Markets closed lower in Hong Kong and Japan, but higher in China. In midday trading in Europe, the DAX 30 in Germany was flat. Markets in Britain and France leaned lower.
By the numbers, the Nikkei 225 in Japan lost 0.11 percent while the Shanghai composite index in China gained 0.52 percent. The Hang Seng index in Hong Kong lost 0.36 percent while the Sensex in India gained 0.07 percent.
In Australia, the S&P/ASX 200 slipped 0.12 percent.
In midday trading in Europe, the FTSE 100 in Britain gained 0.31 percent while the DAX 30 in Germany added 0.03 percent. The CAC 40 in France lost 0.32 percent while the Stoxx Europe 600 added 0.03 percent.
Analysts say the euro can be expected to decline through the new year, but U.S. stocks are likely to take a hit after U.S. Federal Reserve Chairman Ben Bernanke appeared on the CBS news magazine program "60 Minutes" and said the central bank may extend its $600 bond purchasing program.
"It depends on the efficacy of the program. It depends on inflation. And finally it depends on how the economy looks," the chairman said.
Right or wrong, as it did during the Alan Greenspan era, the Fed looks more and more like the go-to institution for answers and for a solid policy response independent of public appeasement. It looks all the more so with the international community all but unanimously opposed to the bond purchasing program that will dilute the dollar and give U.S. exporters that much more of an edge. The Treasury Department for more than a year has been crying wolf regarding China's stubborn currency policy. But the Fed can flick a switch and did so. Bernanke said "it's certainly possible" the Fed will do it again, The New York Times reported.
The Fed has also ignored conservative factions in Washington that reacted negatively to the Fed's move, which could trigger a round of inflation, which is precisely the point.
True, inflation is a mixed blessing, hard on consumers and harder still on 15 million who are out-of-work. Corporations, however, are flush with cash and inflation is expected to scare businesses into making investments -- in hiring, for example -- sooner, rather than later, as the dollar's domestic punch weakens every day for corporations, just as it does for consumers, if inflation is a factor.
Secondly, the public, in general, has a short-term memory glitch and politicians a selective memory glitch, especially when it comes to sub-headlines as opposed to, say, headlines. The fear of deflation never surfaced loud and clear, but inflation has been hovering at about 1 percent on an annual basis and anything lower can suck the economy into a stall. Like a tall ship with lazy sails waiting for a breeze to come along, the curse of an economy becalmed is a tough way to mark time. Just ask Japan.
In that sense, accusing the Fed of triggering inflation may have had some policy makers snickering behind their coat sleeves. It's just as hard to say, "We're for inflation," in public as it is to say "We're for raising taxes." But if level or lower taxes are the only choices available, in theory, the electoral system is systematically making it impossible for a conservative politician to tell the truth.
Sen. Bernard Sanders, Ind-Vt., last week accused the Fed of lending trillions of dollars to corporations, including foreign banks, from the fall of 2008 through the summer of 2009, during the height of the financial crisis. Much of that lending was for loans of seven to 30 days using a system called paper loans, because no collateral was required. The risks were enormous, but the Fed was doing "what we are paid to do," Dallas Federal Reserve President Richard Fisher said.
Translation: The Fed was lending money to General Electric, Verizon and other enormous corporations, in part to make payrolls. But Sanders said the Fed's efforts had "very little positive impact on the needs of ordinary Americans," The Washington Post reported.
On the face of it, Sanders is saying that corporate payrolls are of little consequence.
Relatively speaking, in Vermont, this might be true. But in New Jersey, Ohio, Kansas, California and in a few other states, the Fed's efforts to avoid another Great Depression made sense.