mr. bernanke spoke at -- last year, mr. bernanke spoke at princeton's commencement ceremony. words were aimed at and on jim's -- at an audience of undergraduates. we found them curiously relevant. >> i wrote to inquire about the status of my leave at this university. the letter i got back was "princeton receives many more , qualified applicants." i will make some suggestions. life is unpredictable, any 22-year-old who thinks they know where they will be in 10 years or 30 years is lacking in imagination. whatever life may have in store, each of you has a lifelong project, the development of yourself as a human being. from everyone to whom much has been given, much will be required. from the ones to much has been intrusted, more will be demanded. those most worthy of admiration are those who have made the best use of advantages or cope most courageously with adversities. cynicism is a poor substitute for critical thought and constructive action. economics is a sophisticated field of thought that is so -- superb at explaining to policymakers why the choices they made in the past

mr. bernanke, very smart, very steady, not very exciting. the markets must agree because the markets are up today so we appreciate your testimony. thank you for taking on this job. it's still a difficult economy out there even though it's getting better, and we thank you for, you know, being at the you back live to the hearing room. the chairman is gaveling the session back in. >> committee will come to order. chair now recognizes the gentleman from virginia, mr. hurt, for five minutes. >> thank you, mr. chairman. chair yellen, thank you very much for appearing before our committee. welcome, and i look forward to your tenure. obviously we recognize gnat virginia fifth district how important your task is, and we appreciate your commitment to that task. tell you a little bit about our district. it's a very rural district in central south side virginia. it is a district that historically was dependent upon textiles, furniture, tobacco. still is a very large agricultural producer in our state and in our nation, but we've seen hard times with the

mr. bernanke for a number of times come testify at these very same hearings. you know, i really appreciated three things about him. one, he is very smart, very steady, and not very exciting. and i want to thank -- and i want to say you're following in his footsteps. >> thank you. appreciate that. >> what i would like to talk to you about all of it is the fsoc. and what is happening just in terms of numbers of meetings, what generally are you concerned about bubbles? have you seen anything that, you know, would cause you some concern? we hear that student loans are awfully high and that may be a difficult, you know, issue coming up. so can you tell us a little bit about what you see the role of the fsoc at how often you on the? >> so, i have to say that i'm new to fsoc. i've only been in office 11 days and i've not attended fsoc meetings previously, but there will be one this week. fsoc does meet regularly. the our deputies and staff who meet very frequently. clearly, a major focus is to address potential threats to financial stability, to identify those threat

mr. bernanke, very smart, very steady, not very exciting. the markets must agree because the markets are up today so we appreciate your testimony. thank you for taking on this job. it's still a difficult economy out there even though it's getting better, and we thank you for, you know, being at the >> looking ahead to this you miss, if "newsmakers" this morning, another chance to watch it today. it talks about the board's role when it comes to the nsa and other privacy issues. >> here they are, coming in, closing in on me. i'm still thinking, even eight. when i went through survival school, they taught us the people who capture you are probably the least trained to capture p.o.w.'s, maintain them. the best time to escape his right then. these are rookies and i pulled out my combat masterpiece. i had two rounds. get away, get back. then i fired a round right over there head. they did not flinch. and onesed their rifles of them reached in his pocket a little comic book that some of them carry in their pocket. it had drawings on one side and vi

mr. bernanke, my mother sent me an e-mail during the meeting. she's a retired schoolteacher and my some said tell mr. bernanke that we would like more interest on our savings. this is that i hear from my constituents in my rural arkansas district. they are prudently investing in things like cds and money market accounts and falling behind because of the low interest rates of the last five or six years and feel that it would be unwise to invest in riskier assets that are more suitable for younger people. i had some questions about that but i think maybe the best way to raise them is through this video that retired navy commander has made expressing some of the aim concerns. >> my name is joe. i served in the navy from 1960 to 1983 with three combat tours to vietnam, '68, '69, '72 and the israeli war in '73. i developed defense electronic systems for 25 years. now semi retired i use my experience to help other companies grow and to supplement my retirement income. we have three children plus a foster daughter from vietnam and nine grandchildren. i

mr. bernanke and some other points. peter barnes joins us from inside the beltway with more. peteer?s right. this is five-year anniversary of all these discussions back in 2008 as the financial crisis was unfolding. this is the fed's practice. so we got these minutes today, and they showed that at the fed policy meeting on september 16th, 2008, the dayyafter lehman brothers went bankrupt, fed officials were struggling to size up the magnitude of the crisis.% former fed chairman ben bernanke said at that meeting that he was kind of confused and a little muddled by what was going on but, quote, i think that our policies actually looking pretty good. but by december it was sinking in this was pretty bad. at the policy meeting in mid-december 2008, bernanke said at start of the meeting, as you know we're at historic juncture for the u.s. economy and federal reserve. financial and economic crisis is severe despite extraordinary efforts not only by federal reserve but other policymakers here and around the world. then at the end of the meeting richmond fed president jeffrey lacker challeng

mr. bernanke mentioned fairly frequently, the longer people were out of work, the harder it was going tobecome employed. then without the benefits, it's a very difficult situation. >> right. the incidence of getting reemployed if you're out of work for awhile, it goes down. if you have been out of work for a short period of time, you get back to work. really liked the story. i went to look for the people she's talking about and others are talking about in the data and it's problematic. you don't necessarily see it. i looked at a category called discouraged workers. you can see a pretty hefty bump in december and january. unfortunately, i would have expected to see it more in january than december. that's something we will watch to see if folks who don't get their benefits because one of the theories from the same economist, alan kruger, is that if you get a benefit, you remain attached to the work force. if you don't get a benefit, you might drop out. i also thought i might see them, by the way, in the participation rate but that's come up a little bit. one other area we don't see them i

mr. bernanke -- >> lobbed that out there with the taper. >> that's right. so reits in general are interest rate sensitive. in general, the reit business model is very sound. we are talking about hard assets, inflation hedge, talking about very solid balance sheets. the average reit is leveraged only 50% so that's a very good balance sheet ratio. in addition, the average yield of a reit is about 4% versus 2% so it's a good high yielding stock in general. >> but you say you are not so exposed to the fashion mall business. is that something which helps mitigate the impact of e-commerce which we all know is growing and is here to stay? >> that's true. kimco is neighborhood and community shopping centers. we sell essential goods and services, grocery stores, dry cleaning, drugstores, mcdonald's restaurants, nail salons. these things are very difficult to get over the internet. >> we have been talking about a number of retailers which due to extenuating circumstances had to cut costs, closing stores. but you say there are still more retailers within your wheelhou

mr. bernanke. i am a supporter of quantitative easing.antitative easing did to stabilize this economy. can you tell us, not only what you think happened with quantitative easing, but how you intend to continue the policy on tapering as it is today. >> thank you, congressman. the purpose of quantitative easing, we have been buying longer-term treasury securities. the objective has been to push down longer-term interest rates. i believe we have succeeded in doing that. two more probably make financial conditions accommodative. the purpose is dispersed spending in the economy and to achieve more rapid economic growth. i believe we have been successful. some examples would be that as mortgage rates fell to historically low levels, we certainly saw a pickup, a very meaningful pickup in housing activity off the very low levels it has fallen to. we have also seen a very evening will increase in house prices. i think that has improved the security of a very large number of households. many households have been underwater in their mortgages and th

mr. bernanke to come to the district and we'd host a town hall together. i am still waiting on pins and needles for him to answer. maybe i'm giving up that eternal hope now, but i would reissue that invitation to you. >> thank you. much appreciated. i'll try to do that. >> well, i'll start waiting on pins and needles for you. okay. and the reason that i would make that offer is that in this hearing room, there have been references by people sitting a the that desk as seniors being collateral damage. that the low interest rate is acceptable collateral damage. and i'd like someone that sits on that side of the table to come out and explain that to the seniors that show up at my town hall meetings who say that we lived our life correctly. we saved. we paid for our homes. and now we're caught in policies that reduce our ability to live on our savings, and they're eating on their principal, just trying to get by. that does not seem acceptable, because many don't have the capability to go back to work. in a previous testimony somewhere, you have said that there

let's begin with a moment of silence for our departing federal reserve chairman mr ben bernanke. ok moving right along that's it done now let's look to the future for several years we've had technology available to us that allows one to pay for goods and services with smartphones no wallets necessary at all now my cell phone today i have both the square out and the google wallet up downloaded and i want to make this very very clear i am not i repeat not a first generation adopter of new technology and never have been and i probably never ever will be i still like re my books on paper and i'm not interested in going to outer space and but that said i do love the idea of potentially never ever ever having to deal with my bank ever again i'm pretty good now this has been a dramatic week in the developing world of virtual payments out here in new york city on tuesday called the new. top financial regulator benjamin lawsky bitcoin advocates discussed what they view as the advantages of prepare currencies and over our current worldwide money system what those advantages could and can b

mr. bernanke. i am a supporter of quantitative easing. i would like to hear from you what you think quantitative easing did to stabilize this economy. can you tell us, not only what you think happened with quantitative easing, but how you continue the policy on tapering as it is today? >> thank you, congressman waters. the purpose of quantitative easing -- we have been buying longer-term treasuries and agency backed securities, the objective has been to push down the long term interest rate. i believe we have succeeded in doing that. enter more broadly make financial conditions accommodative. the purpose is to achieve more rapid economic growth. and i believe that we have been successful. some examples would be that, as mortgage rates fell to historically low levels, we certainly saw a pickup, a very meaningful pickup, in housing activity. we have also seen a meaningful increase in house prices. i think that that improves the security of a large number of households. many households have been underwater in their mortgages. that fraction h

mr. bernanke. >> i can't hear. >> i'm a supporter of quantitative easing. and i would like to hear from you what you think quantitative easing did to stabilize this economy. can you tell us not only what you think happened with quantitative easing, but how, again, you intend to continue the policy on tapering as it is today. >> thank you, congressman waters. the purpose of quantitative easing, we've been buying longer-term treasury securities, and agency mortgage backed securities. the objective has been to push down longer-term interest rates. and i believe we've succeeded in doing that. and to more broadly make financial conditions accommodative. the purpose is to spur spending in the economy, and to achieve more rapid economic growth. and i believe we've been successful, and some examples would be that as mortgage rates fell to historicly low levels, we certainly saw a pickup, a very meaningful pickup in housing activity off the very low levels it had fallen to. we also have seen a very meaningful increase in house prices, and i think that that's improve

mr. bernanke takes the reins from mr. greenspan, you're at the epicenter of subprime to develop about 15 months later. it seems even though there hasn't been a lot of fed chairmen, they always seem to come into office and the market gives them an unusual greeting. i like looking at the ten-year. it's down in yield sharply today but i also note you make all the excuses about weather you want i think the ism and the real data in addition to all the other global pieces moving means it's a multifront issue with regard to the marketplace. and, and if you look at 2s to 10s on the yield curve, it continues to flatten. it tells me whatever is making all these pieces move the way they are, they may continue to do so, especially because of the next chart which is dollar/yen intraday. a big swoon on the dollar and, of course we're hovering at the same benchmark as the ten-year note. lowest since october 31st so i guess it's happy halloween. >> and that lower dollar has pushed the gold price higher today as well. rick, what do you th

mr. bernanke, and continue to ease. that is the takeaway. so stocks rebounded.w highs yet. we may still do it at a later point but in the meantime, the gdxj, is up 53% since december 25th. and other markets say vietnam is up 13% this year. there are other markets that, in my opinion, are far more attractive than the s&p 500 or the russell 2000. >> i don't think you could -- i certainly think you could make the argument that there are other markets around the world where valuations are much more attractive, perhaps, than they are here in the united states by virtue of the 30% gain or so that we had last year. but there's also obviously more risk. do you think that the concerns we had over emerging markets were overdone? do you think we should still be fearful of what's taking place in some of the emerging markets or not? >> yes. i think you need to be fearful. if you take a view for the next five to ten years, and you look at valuation of u.s. equities and the valuation in emerging economies, then i think i can make the case that over the next five to ten years i

mr. bernanke. >> i can't hear. >> i'm a supporter of quantitative easing.to hear from you what you think quantitative easing did to stabilize this economy. can you tell us not only what you think happened with quantitative easing but how, again, you intend to continue the policy on tapering as it is today. >> thank you, congresswoman waters. the purpose of quantitative easing, we've been buying longer-term treasury securities and agency mortgage-backed securities. the objective has been to push down longer-term interest rates. and i believe we have succeeded in doing that. and to more broadly make financial conditions accommodative. the purpose is to spur spending in the economy and to achieve more rapid economic growth. and i believe we've been successful. and some examples would be that as mortgage rates fell to historically low levels, we certainly saw a pick-up, a very meaningful pick-up in housing activity off the very low levels it had fallen to. we also have seen a very meaningful increase in house prices. and i think that that's improved the securit

chuck schumer said to ben bernanke in 2012 "get to work, mr. chairman." we are sure the democrats will weigh in and talk about the impact of sequestration and the fiscal policy impact on the economy will try to get her to say whether the republican policies are hurting. >> the elephant in the room is really in inflation or lack there of. it is only at 1.1%. yellen bey will janet talking about that tomorrow? will she be able to? >> i think so. it is related to all the talked about jobs. how much slack is there in the labor market? i think janet yellen will highlight those who are jerkily unemployed, unemployed for , those who have fallen out of the labor force, millions of extra workers who are potentially ready to step into the work force. >> does that jerkily relate? s will improve. the workers are more fully employed. pretty incredible when you think of everything they have done. >> it is surprising to a lot of people including those in the fo and see. -- fomc. you would have to bet against it. there would be questions to ask. you would want to know not

. >> everybody started out with ben bernanke, mr. you said fed induced dead manned is waning. i like this dynamic. okay. can you expand on it from your perspective? >> yeah, we're in a critical juncture in housing and it started when rates went up that small 1% back in june. we're going from an investor-led housing market to an end user-led housing market. that's creating a lot of problems. and -- >> let me interrupt you. you said something in your newsletter i've never seen before. you brought in bidding leverage. leverage on housing based on bid on investors, not people who necessarily want to live there. can you expand on that as well? >> tom barac was on this morning. love this guy. follow what he does, not necessarily what he does in my case. he was the first in the distressed housing market and also the first out early last year. but in these markets where institutional investors may have bought 300,000 houses over the last couple of years and ma and pa investors, 250, 300,000. they have to bid on 10,000s to buy that one becaus

back now with more from mr david stockman now david i'm going to jump right in now ask you do you share ben bernanke and janet yellen deflationary fears. deflationary fears absolutely not that is just a canard that they constantly try it out when all else fails to justify continuing to run burning pres at these crazy rates even sixty five billion a month after all we're in the fifth year of this so-called recovery look at the last twelve thirteen years the c.p.i. is average two point four percent if you take the one they prefer you know the p.c. eat deflator less food energy assuming no one has had to eat their home or eat for twelve years but even then it's one point eight percent. the rates do bob all up and down a little bit by a month or quarter depending on what's going on in the world economy commodities oil a lot of other things but on trend there is absolutely no whiff of deflation in the air and besides that where was that ever written that if you don't make two percent inflation you're failing to help the economy i mean inflation is all for debtors and is a huge negative and harm to savers

mr. chairman. you alluded to continuing the policies that were initiated by the committee that you served on with bernanke. i am a supporter of quantitative easing. i would like to hear from you what you think quantitative easing did to stabilize this economy. can you tell us, not only what you think happened with quantitative easing, but how you intend to continue the policy, on tapering as it is today? >> thank you, congressman waters. the purpose of easing and buying longer-term treasuries and agency backed securities, the objective has been to push down the long term interest rate. i believe we have succeeded in doing that. and to make financial conditions accommodative. the purpose is to achieve more rapid economic growth. and i believe that we have been successful. some examples would be that, as mortgage rates fell to historically low levels, we certainly saw a pickup, a very meaningful pickup, in housing activity. we have also seen a meaningful increase in house prices. and i think that prove the security of a large number of households. many households of an underwater in their mortgages. that fr

ben bernanke says what we have done in the past is use a new phrase, that means we have to throw this phrase out. mrlet's use the word carefully. less of a code word for a possible fed action and they have a vote on this. it is unanimous to use the word that they are carefully watching financial markets in their statement, not closely. these words matter. sandra: they do matter. it is typically an ad for. >> typically is an adverb. peter barnes. sandra: let's check the markets. nicole petallides on the floor of the stock exchange watching an earnings winner and loser. >> let's look at winners and losers. i know of hewlett-packard has down arrows but we are calling it a winner because it hit a new 52 week high earlier today. the numbers it came out with in the latest quarter we could see revenue doing well but also earnings per share of looking at hewlett-packard, meg whitman turning the stock around and the company in particular and we saw growth in areas we haven't seen so that is good news of his pulling back. groupon is down 20% at the moment so this is -- below of the day was 818 and it is 221 a

mr. chairman. you alluded to continuing the policies that were initiated by on committee that you surfed with bernanke. i am a supporter of quantitative easing. i would like to hear from you what you think connotative easing did to stabilize this economy. can you tell us, not only what you think happened with how youtive easing, but continue the policy, as it is today? >> thank you, congressman waters. easing and buying longer-term treasuries and securities, the goal is been to push down the long term interest rate. i believe we have succeeded in doing that. conditions financial accommodative. achieve mores to rapid economic growth. and i believe that we have been successful. that, asples would be mortgage rates fell to historically low levels, we certainly saw a pickup, a very meaningful pickup, in housing activity. we have also seen a meaningful increase in house prices. and i think that prove the security of a large number of households. many households of an underwater in their mortgages. that fraction has diminished substantially. that means that those households are in a better position to spend