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Mr Bernanke, confront your fears and don't delay

Moorad Choudhry, Department of Mathematical Sciences, Brunel University
Tuesday, 24 Sep 2013 | 1:21 AM ET
Ben Bernanke
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Ben Bernanke

At a young age I discovered I had an aptitude, if not necessarily innate talent, for sport. But in the world of competitive team sports, I soon realized that mental toughness and calm nerves were as important as talent.

The winter sport at my school was (field) hockey. At the age of 15 I made the school's first eleven. However the others in the team were a bit savvier, not to mention louder, on the pitch than I was and I soon found the shouting and finger-pointing after mistakes were made too much to handle. It soon showed in my body language. After one practice match the games master walked up to me and said, "I get the impression you didn't enjoy that very much". To which I replied, "No sir, I didn't."

At that point, and demonstrating a supreme unsuitability for coaching schoolboys, rather than simply saying, "Be strong, you wouldn't be there if you weren't good enough, keep at it", the sports teacher simply dropped me down to the second eleven the following week. I had lots of fun in the following weeks playing in that team, where I was top dog.

(Read more: No taper! Did Bernanke fool the Street?)

When my older brother found out he was livid, and made it clear he thought I was a wimp. "You should confront your fears, don't run away from them! You'll never get better just playing at your comfort level."

Wise words. What does the US Federal Reserve think will happen when it starts to ease off on its $85 billion-per-month asset- purchase program? Markets will sell off? The economy will crash? Apparently the 11th-hour decision to hold on "tapering" was due to some recent weak economic statistics. But will it get easier if we hold off until December or January? Of course not, in fact the opposite.

There is never going to be a 100% "right" time to start tapering. But each month one holds off, the harder it will be to actually start it, and the more action one will have to take. Just like one can't spot a bubble forming until one is in it, by which time it's too late.

(Read more: Fed: No taper)

Central banks have been underwriting the private-sector stock market for so long it's almost becoming impossible to wean the market off this support. But wean we must, if we aren't to turn the Western capital markets into one gigantic Ponzi scheme, one in which government borrowing is financed by another government department printing money.

And we aren't even talking about raising interest rates, stuck at around 0 percent for virtually half a decade now. How much more instability will be created the longer we put off waiting until the right moment to start raising rates in miserly 25 clips?

Confront your fears. You can't improve by staying in the comfort zone.

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