Bernanke Attempts to Soothe Doubters
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Ben S. Bernanke, the Federal Reserve chairman, continued on Saturday to rebut critics who feared the central bank’s latest bid to stimulate the economy could trigger dangerous inflation down the line and antagonize other countries by weakening the dollar.Mr. Bernanke said the Fed’s decision on Wednesday to pump $600 billion into the economy by mid-2011 was a response to the rate of inflation being too low and an attempt to mitigate high unemployment, though he suggested that the first problem was easier to fix than the second. “We’re not in the business of trying to create inflation,” he said at a conference here, speaking on a panel with his predecessor, Alan Greenspan. “Our purpose is to provide some additional stimulus to help the economy recover and to avoid, potentially, additional disinflation.” Not everyone at the conference, organized by the Federal Reserve Bank of Atlanta and Rutgers University and focused on the central bank’s history, agreed.Mr. Bernanke said that the new approach “will work, or not work, in much the same way that monetary policy — ordinary, more conventional, familiar monetary policy — will work” and that there was “not as much discontinuity as people think.” The statement seemed directed both at inflation-fearing critics and overseas critics — from Germany and Brazil — who say the central bank is effectively weakening the dollar with its approach -Sewell Chan/NY Times
Beware The Fed TideStory
This week, desperation became palpable at the Fed. In both the formulaic statement that accompanied its FOMC policy decision and Chairman Ben Bernanke’s unusual (and clumsy) Washington Post op-ed follow up, the guardians of our currency expressed grave disappointment at the slow pace of US economic recovery and emphasized the continued threat of deflation. The Fed is now pledging to defeat this recession using any monetary means necessary. Unfortunately, their embrace threatens to smother our economy.Despite its paternalistic rhetoric, the Fed really has just a few simple goals: allow for the perpetual expansion of the federal deficit, push up stock prices to create the illusion of wealth, and stimulate consumer spending. Per capita, the commitment to quantitative easing comes to almost $2,000 per American.What's more, if this program fails to pull the economy out of recession, the Fed stands ready to up the ante. This amounts to little more than gambling; but instead of using their own accounts, the central bankers are wagering the nation's savings -John Browne/Euro Pacific Capital
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