Ben Bernanke was cornered into admitting some unpleasant truths today.

In Washington at the Senate Banking Committee, our bearded Federal Reserve Chairdude said the economy will continue to ‘weaken’ and things will stay sluggish for consumers.

Most notably, Bernanke seemed to address the recent airlines bid to blame oil speculators for the rising costs. The 12 CEOs of the country’s major airlines banded together last week and wrote this stern letter.

The ‘Nanke was having none of it. According to a New York Times report on his speech, it’s a simple supply problem:

In his testimony, he was especially pessimistic about any easing of energy prices, dismissing suggestions that they were being driven by speculation in futures markets. Instead, he said high energy costs reflected the markets’ recognition that demand was outstripping supplies.

“Over the past several years, the world economy has expanded at its fastest pace in decades, leading to substantial increases in the demand for oil,” Mr. Bernanke said. “On the supply side, despite sharp increases in prices, the production of oil has risen only slightly in the past few years.”

So what now, airlines?! Apparently now is not the time to go for the ‘oil speculators’ scapegoat. So until futher notice, there is no good news on the high gas prices front.

It’s strange how sometimes when the omniscient Fed Reserve chairman speaks, all wait to hear what they usually already know. I mean, it’s not like he can come out and say, ‘In case you guys didn’t notice, gas prices are friggin’ high, aren’t they? WTF is up with that?’.

Admittedly, Big Ben has other fish to fry today. Answering questions on Fannie Mae and Freddie Mac took most of his time, not to mention a couple of helpful reassurances that the financial system won’t fail and the world probably won’t fall into economic ruin just yet.

NYT: Economy Will Stay Sluggish, Bernanke Tells Congress, July 15, 2008