Has Ben Bernanke triggered the next phase of the global financial panic?

Yesterday, U.S. Federal Reserve Chairman Ben Bernanke spoke during a press conference regarding the latest deliberations of the Federal Open Market Committee (FOMC), the policy setting group at the center of efforts to rekindle economic growth. His comments were expected to largely hew along previous lines, including the assurance that the so-called "tapering" – the withdrawal of market stimulus programs – will come at an incremental and acceptable pace.

"To use the analogy of driving an automobile, any slowing in the pace of purchases will be akin to letting up a bit on the gas pedal as the car picks up speed, not beginning to apply the brakes," Bernanke said. He added that the FOMC reserved every right to either accelerate or reverse previous policy decisions, depending on macroeconomic development and initial reaction to Fed moves.

Yet instead of embracing the soft-spoken chairman's words at face value, global markets plunged. European stock exchanges shed between 2 percent and 4 percent of their value while American indexes plunged by at least 1 percent. Asian markets were also battered, including the Nikkei, which has already been facing pressure from the Japanese government's self-styled "Abenomics" initiative.

The next few days will be very telling for the Fed and its quantitative easing program. Deteriorating confidence in the central bank's abilities to control market expectations could be pushed to the forefront, creating unneeded market instability for a global economy troubled by surging youth unemployment and falling incomes.

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