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In the gospel according to U.S. Federal Reserve Chairman Ben Bernanke, the ends justify the means. When asked Wednesday if the $600 billion quantitative easing program had, by lowering the value of the dollar, lowered the standard of living for Americans, Bernanke said the goals of the program set to end in June justified the the process.
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The goals of the program, he said, were to first "maintain low and stable inflation," which would be "good for the dollar," by which he meant, "maintaining the purchasing value of the dollar."
"Obviously good," he said.
The second goal, Bernanke said at the first-ever press conference held to explain the central bank's monetary decisions, was "getting a strong recovery and to achieve maximum employment … and, again, a stronger economy, growing, attracting foreign capital, is going to be good for the dollar."
This was Economics 101 delivered by the former Princeton University professor in his new venue, the nation's central bank. Time and again during the press conference Bernanke returned to fundamentals, defining the Open Market Committee's interpretation of rising oil prices as basic "supply and demand."
The expanding demand for oil is almost entirely made up of new demand from emerging economies, he said, and, of course, "as anyone who watches television can tell you," disruptions in supply in the Middle East are not helping matters at all.
He postulated that rising oil prices were, indeed, a drain on the U.S. recovery, but reminded reporters the Fed controls neither the growth rate of emerging economies, nor does it produce oil.
And just in case there's any confusion you could tell Bernanke is not running for office. He conducted his press conference sitting down.
Bernanke is not a man who appears to be pulling any punches even as he makes history, soft spoken, mannered, and calm as he is. No grandstanding. No waving to relatives who might be watching for a glimpse of him on the evening news.
He explained the controversial $600 billion securities purchasing program would end in June, but the bank would reinvest, keeping the size of its portfolio intact. The advance notice would give markets plenty of time to adjust to the news, lessening any jolts, he said.
It is still interesting to note that the Fed, so wary of any appearance of politically motivations, chose to hold a press conference at all, given the public penchant for political questions. It seemed important that Bernanke not try to sell, but to explain, at the same time showing confidence, given the Fed's smallest moves ripple so critically through the financial system.
It requires a considerable poker face to pull it off. Meaning no disrespect, theater requires an appropriate review.
Here's the review:
Bernanke opened a one-man show backed by a committee of bank governors Wednesday, which closed within the hour, leaving some reporters hungry for more, but most satisfied at the first-ever performance by a central bank chairman. The show was sober and effective. The headliner appeared calm -- no beads of sweat appeared on his impressive brow. Given the topic was the nation's economy, without a doubt, upcoming performances will remain popular. The bottom line on the economy: There is something in it for everyone.
In international markets Thursday, the Nikkei 225 index in Japan gained 1.63 percent, while the Shanghai composite index lost 1.31 percent. The Hang Seng index in Hong Kong lost 0.37 percent, while the Sensex in India lost 0.81 percent.
In Australia, the S&P/ASX 200 index added 0.13 points, less than 0.01 percent.
In midday trading in Europe, the FTSE 100 index shed 0.22 percent, while the DAX 30 in Germany added 0.42 percent. The CAC 40 index in France rose 0.46 percent, while the Stoxx Europe 600 gained 0.02 percent.
