Is Gold money? Apparently not according to Ben. While technically correct, all of those gold bugs hording their physical gold for the impending Global Economic Armageddon, round 3, are jumping at the ready. Gold, jumped $23 in a day and hit record highs although that appears to have more to do with Europe and Contagion.

Federal Reserve Chair Ben Bernanke testified before Congress and he was full of things no one wanted to hear. Congressman Ron Paul questioned Ben and shock of all shocks, uttered a base Keynesian concept, one needs to put Stimulus directly in the hands of the people, or bottom up Stimulus, in the mix:

Of course Ben set Wall Street abuzz with more fears of quantitative easing. Why policy makers use the nebulous term stimulus for things that don't seem to stimulate, I do not know.

From Bernanke's testimony:

On the one hand, the possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support. Even with the federal funds rate close to zero, we have a number of ways in which we could act to ease financial conditions further. One option would be to provide more explicit guidance about the period over which the federal funds rate and the balance sheet would remain at their current levels. Another approach would be to initiate more securities purchases or to increase the average maturity of our holdings. The Federal Reserve could also reduce the 25 basis point rate of interest it pays to banks on their reserves, thereby putting downward pressure on short-term rates more generally. Of course, our experience with these policies remains relatively limited, and employing them would entail potential risks and costs. However, prudent planning requires that we evaluate the efficacy of these and other potential alternatives for deploying additional stimulus if conditions warrant.

While Bernanke defends QE2, Economist James Hamilton has performed analysis on the effects of quantitative easing and shows it had modest effects on the economy. Regardless, the comments toasted the dollar and caused the beleaguered Euro to surge.

Federal Reserve Chairman Ben Bernanke's warning that the U.S. economy may require additional monetary easing undermined the dollar Wednesday, which set a record low against the Swiss franc and fell sharply versus the euro as fears about Europe's debt crisis were momentarily displaced.

While Bernanke insists inflation is transitory, analysts went nuts on the hint of QE3. Euro Pacific Capital Economist Pento:

Can someone explain how the processes he used to combat deflation—lowering interest rates and expanding the money supply—if those processes are going to be intensified what makes him think inflation is going to be transitory? The gentleman talking about exit strategies a little while ago is now talking about asset purchases and cutting rates on reserves. That sounds schizophrenic to me.

Meanwhile we have a jobs crisis. The Fed? Yes, it's a problem, oh well, what can one do.

Long-term unemployment imposes severe economic hardships on the unemployed and their families, and, by leading to an erosion of skills of those without work, it both impairs their lifetime employment prospects and reduces the productive potential of our economy as a whole.

The still-substantial slack in U.S. labor and product markets, which has made it difficult for workers to obtain wage gains...

Yet does quantitative easing create jobs? Of course, according to the world of Ben:

With respect to employment, our expectations were relatively modest; estimates made in the autumn suggested that the additional purchases could boost employment by about 700,000 jobs over two years, or about 30,000 extra jobs per month.4 Even including the disappointing readings for May and June, which reflected in part the temporary factors discussed earlier, private payroll gains have averaged 160,000 per month in the first half of 2011, compared with average increases of only about 80,000 private jobs per month from May to August 2010. Not all of the step-up in hiring was necessarily the result of the asset purchase program, but the comparison is consistent with our expectations for employment gains. Of course, we will be monitoring developments in the labor market closely.

Considering the massive size of QE2 as well as the size of the U.S. economy, don't these increases seem like the error margin than payroll increases that could be correlated? At what cost elsewhere, such as in the price of commodities, can this jobs program be justified? Can Congress take their medications, become sane and practical for just one minute and enact a direct jobs program with strong Hire America and Buy American requirements? Even Ron Paul's quip about handing every American $17,000 has to be a better idea than this.

One thing is clear from the Q&A, we have a whole slew of bat shit crazies in Congress now.

One of the more despicable dialogs was from Congressman Ed Royce. He's trying to get the Federal Reserve to buy into the only way to fix the deficit is to screw working people, retirees, the sick and the poor. This is pure bunk, but shows just how psycho and economically clueless these idiots are in Congress are and how laser focused they are to decimate what is left of social safety nets. What that says about the ignorance of those who voted for them, we'll leave for another day. What's worse, Bernanke seems to endorse it. Let's see, we can print money, bail out the banks, run wars around the globe, but when it comes to social safety nets which Americans paid into and are promised, all eyes are on destroying that.

Here is an example of yet another clueless Representative who tries to corner Bernanke on taxes. Amazingly, Sean Duffy doesn't quite get how his question shows his ignorance on basic tax policy. Ya gotta feel for Bernanke getting ridiculous questions like this one. By the way, a good example of new taxes that would create jobs are the ones which close loopholes on tax breaks for multinational corporations who offshore outsource your job. Another would be a penalty tax for those who move manufacturing abroad.

So there ya have it. The Federal Reserve cannot get Congress to do pretty much anything that would really create jobs, such as a massive jobs program rebuilding key critical infrastructure and instead we have a bunch of wackos for representatives out to destroy the U.S. middle class at all costs.

Oh yeah, Bernanke warned if the debt ceiling isn't raised the United States will have Economic Armageddon. Who could forget those political games.