Opening statement of the FOMC Chair, Senate Testimony February 27, 2008: Senators, we find ourselves in a very challenging situation. Following the dot com implosion, my predecessor at the Fed slashed rates to a generational low of 1%; the FOMC then kept rates at 1% for over a year. While that re-inflated the economy, it also set off a shock wave of inflation unseen since the 1970s. Houses doubled in price, Oil is up 5 fold, food stuffs have tripled, and the dollar has collapsed. Gold is at multi-decade highs. ... The credit crunch is unprecedented, far worse than the S&:L collapse and Long Term Capital Management -- combined....

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