Palin to Bernanke: Cease and Desist
Here are snippets from Palins prepared remarks obtained by National Review Online:
Im deeply concerned about the Federal Reserves plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is quantitative easing. It means our government is pumping money into the banking system by buying up treasury bonds. And where, you may ask, are we getting the money to pay for all this? Were printing it out of thin air.
The Fed hopes doing this may buy us a little temporary economic growth by supplying banks with extra cash which they could then lend out to businesses. But its far from certain this will even work. After all, the problem isnt that banks dont have enough cash on hand its that they dont want to lend it out, because they dont trust the current economic climate.
And if it doesnt work, what do we do then? Print even more money? Whats the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 wont be followed by QE3, 4, and 5, until eventually inevitably no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?
All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And its not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar a direct result of the Feds decision to dump more dollars onto the market is pushing oil prices upwards. Thats like an extra tax on earnings. And the worst part of it: because the Obama White House refuses to open up our offshore and onshore oil reserves for exploration, most of that money will go directly to foreign regimes who dont have Americas best interests at heart.
We shouldnt be playing around with inflation. Its not for nothing Reagan called it as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man. The Feds pump priming addiction has got our small businesses running scared, and our allies worried. The German finance minister called the Feds proposals clueless. When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again, maybe its time for Chairman Bernanke to cease and desist. We dont want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings. We want a stable dollar combined with real economic reform. Its the only way we can get our economy back on the right track.
A true shame that Palin has been denigrated as she had.