Think tank BAI (Bubble Analytics Institute) has credited Ben Bernanke with forcing General Motors Corp the the brink of bankruptcy.
By driving the fed rate down from 5.25 to 2.0 in just a few months, Bernanke caused the value of the dollar to plunge up to 40% against other major world currencies.
This triggered panic in the "Global Pool of Money". Seeking a safe haven, investors rejected both real estate and the stock markets and instead poured billions into the only remaining investment opportunity: commodities.
From Sept 07 to July 08, commodities spiked to record levels, including oil which went from $60/bbl to $147/bbl.
In the US, gasoline spike to over $4/gallon. The US economy was staggered and consumers frantically sought ways to reduce their gasoline outlays.
Unfortunately for the US automakers, the only profitable segment of the auto market, the SUV market, was hard hit. Sales of SUV's plunged up to 40%. For an already struggling GM this was a devastating blow.
It had taken years to build up the SUV model lines and market segments. Bad Boy Bernanke destroyed all that in 9 months, sending the US auto market into a tailspin.
Since oil has now returned to $62/bbl, ending another in a series of asset bubbles triggered by o'er hasty fed action.
Analysts at BAI think that Bernanke may have been suffering from an acute case of "Fed Envy". His predecessor, Alan Greenspan, had created at least two dramatic and interesting asset bubbles: the 2001 dot-com stock market bubble, and the ongoing world wide residential real-estate bubble.
Bernanke, apparently, did not want to be left out of the record books so he decided to have one of his own. No "bubble envy" for Ben.
Bernanke biographer, Fen Rogers, notes that, despite his cautious and shy demeanor, Bernanke is a bit of a rougue:
"'Bad Boy Ben' or 'Big Ben' was notorious in high school. With his powerful cerebellum and encyclopedic knowledge of the Great Depression he would hold forth under the school's large Magnolia trees at lunchtime with stories of how the Great Depression could have been avoided with advanced monetary policy. His stories were so compelling, cheerleaders would be whipped into erotic frenzy. Teachers from his high school, said it was rare to see Bad Boy Ben riding his bike home from school without one or two cheerleaders seated on the handle bars."
