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Bernanke Suggests Fed Will Do More to Spur Economy; Chilean Miners Begin to Head Home

Fed Chairman Ben Bernanke; Getty Images file photo

Stock futures jumped after a much-anticipated speech by Ben Bernanke Friday morning, in which the Fed chairman indicated that the central bank may need to do more to stimulate the economy and reduce unemployment.

“There would appear — all else being equal — to be a case for further action,” Bernanke said, citing continued long-term unemployment.

But with the interest rate already cut to near zero, the Fed would need to take other, less conventional steps to stimulate the economy. One option would be for the central bank to purchase more long-term Treasury bonds. The Washington Post explains:

That would help the economy by lowering long-term interest rates, making it cheaper for Americans to take out a mortgage or for businesses to borrow money to build a new factory.

But with less experience using such tools, Bernanke said, the Fed must proceed with caution:

“One disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public.”

The speech suggests the Fed will announce plans to purchase more treasury bonds at its next Federal Open Market Committee meeting Nov. 2-3 — it has already purchased almost $2 trillion in assets over the last two years. But Bernanke did not give any details of the size or pace of purchases that the fed is considering.

You can read the full text of the speech here. And the Wall Street Journal sums up four takeaways from the talk.

Chilean Miners Head Home

Three of the 33 rescued Chilean miners were released from the hospital Thursday and headed home, and more are expected to be released Friday.

“There is a group of doctors checking them out, but they came out in fantastic condition,” Dr. Jean Romagnoli, chief medical officer for the mine rescue, told CBC News.

Meanwhile, some of the first interviews with the miners are beginning to come out.
The Guardian spoke to shift foreman Luis Urzua:

Speaking from a hospital bed at the San Jos̩ mine, shift foreman Luis Urz̼a Рthe man who kept the Chilean miners alive for two months Рsaid his secret for keeping the men bonded and focused on survival was majority decision-making.

“You just have to speak the truth and believe in democracy,” said Urzúa, his eyes hidden behind black glasses.

In an interview with the Washington Post, some of the miners describe the difficulty and despair that they felt in the weeks before they were first found:

“We were waiting for death,” said [Richard] Villarroel, 26, who had lied to his mother about the work he had landed in this century-old mine. “We were wasting away. We were so skinny. I lost 26 pounds. I was afraid of not meeting my baby, who is on the way. That was what I was most waiting for.”

The Post also reported that there was discord in the mine at first, including disagreements that led to fistfights, but that “two miners and relatives said the men had made a pact to keep secret the discord that was a part of their struggle.”

Now that they are out, the miners are being showered with offers of free vacations and other gifts, MSNBC reports, including soccer game tickets, iPods and trips to the Greek Islands.

Strikes continue in France

French oil production was disrupted Friday because of a fourth day of strikes over a planned government pension reform that would raise the retirement age from 60 to 62. Workers at all 12 of the country’s refineries are on strike, along with railway workers and others.

Dow Jones Newswires reports:

The country’s police have opened the strike-blocked access to the country’s fuel warehouses and are keeping it open to prevent shortages. Unions have said fuel shortages may occur within a few days while government officials said there is fuel for one month.

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