Courtesy of Mish.
It's very seldom that I agree with Bernanke on anything. He is wrong about the savings glut, about the cause of income inequality, about deflation, and countless other things.
Bernanke never admitted the Fed's role in creating the housing bubble, and he does not see the new bubbles that have formed.
Yet today, Bernanke stated many things in a cohesive manner that I happen to agree with.
China Takes Marbles
Please consider US Congress Pushed China into Launching AIIB, says Bernanke.
Beijing was pushed into launching the Asian Infrastructure Investment Bank by US lawmakers’ refusal to give China greater clout in existing multilateral institutions, Ben Bernanke has said.
“The US Congress is largely at fault for all that’s happening,” the former chairman of the Federal Reserve said in Hong Kong on Tuesday.
America’s legislature blocked a 2010 International Monetary Fund agreement to shift 6 per cent of quota — and voting rights — to emerging economies, which Mr Bernanke believes would have “better reflected the increasing role of China” and other nations.
“The US Congress has not approved it. They should, they haven’t,” Mr Bernanke said. “So I understand why other countries say, ‘well let’s take our marbles and go home’.”
The AIIB, which will be capitalised at $100bn, now has 57 members including most big European economies.
However, the former Fed chairman played down the practical implications of the AIIB, saying the bank was largely symbolic.
Mr Bernanke also said too much attention was being focused on the internationalization of the renminbi, which was as much a matter of “national prestige” as of practical economic value. In reality, he said, the Chinese currency’s share of global reserves was “very tiny” and even its share of trade settlement was “modest”. …
