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While on a United Airlines flight from New York City to Los Angeles this week, a fellow passenger handed me a copy of the The Wall Street Journal Nov. 15 op-ed by Alan Blinder—"In Defense of Ben Bernanke"—and suggested that I write a letter to the editor if I disagreed with the Princeton University professor's claims. Having read the piece, I told the passenger over my shoulder, "You bet I will." Prof. Blinder seems blind to the clear and present dangers of QE2. Instead of seriously discussing these dangers, he takes us on an excursion to a Keynesian utopia, a...

There has recently been a lot of pushback against QE from conservatives. In this post I pointed out that plenty of conservatives support monetary stimulus. Here I’d like to direct 7 arguments against my fellow right-wingers: 1. The Fed isn’t really trying to create inflation. The Fed doesn’t directly control inflation; they influence total nominal spending, which is roughly what Keynesians call aggregate demand. Whether higher nominal spending results in higher inflation depends on a number of factors, such as whether the economy has a lot of underutilized resources. But it’s certainly true that for any given increase in NGDP,...

QE2 and the Titanic Nov 10th, 2010 by Michael Pettis China reported an October trade surplus of $27 billion Wednesday. This is a very big number and not one likely to soothe anger directed at China. It will be very hard for China credibly to argue that it is trying to contribute to global growth while pulling in more and more foreign demand. Here is the article in the People’s Daily: China’s exports rose 22.9 percent in October from a year earlier, while imports increased 25.3 percent, the General Administration of Customs said Wednesday. China’s trade surplus expanded to 27.1...

Last week I reported that China was very upset by President Obama's decision to monetize more of our debt. This is quite understandable since they hold such a significant portion of our debt and overnight the value was reduced by twenty percent.

Eric Rosengren defends Fed policy, raises recovery concerns By Herald staff | Wednesday, November 17, 2010 | http://www.bostonherald.com | Business & Markets PROVIDENCE, R.I. - New England’s top banker Eric Rosengren defended the Federal Reserve’s controversial plan earlier this month to purchase $600 billion in long-term Treasury bonds, telling an audience in recession-ravaged Rhode Island that the Fed’s concerns unemployment currently trumped fears about inflation. He said the country will likely need "four to five years of relatively strong growth to bring the unemployment rate down significantly."

Ben Bernanke is emerging as a high-profile scapegoat as critics ridicule his new "quantitative easing" policy. Charlie Gasparino on why mocking the non-partisan Fed chair is bad for America. __________________________________________________________________________________________________________________________________________________________________________ Here's how you know Ben Bernanke, the mild-mannered chairman of the Federal Reserve, a scholar of the Great Depression once considered a sage for saving the banking system during the 2008 bank meltdown, has suddenly found himself a target of ridicule lumped in with the financial morons and evildoers like Dick Fuld, Lloyd Blankfein and the rest of the fat cats of Wall Street. Go to YouTube.com, and one of...

WASHINGTON—The Federal Reserve's latest attempt to boost the U.S. economy is coming under fire from Republican economists and politicians, threatening to yank the central bank deeper into partisan politics. A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. "The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment," they say in an open letter to be published as...

When I was growing up, China's Communist leaders would attack the United States as "capitalist running dogs." How the world has changed: Chinese leaders now publicly fret about America's reliance on "outmoded central planning." Talk about being called ugly by a frog. The Chinese official specifically was referring to the Federal Reserve's decision to pump $600 billion of extra liquidity into the economy. But instead of being called "QE2," this new bout of quantitative easing should be called the "Titanic." Interest rates already are very low, so the argument from the Federal Reserve and the Obama administration that the economy...

From CNBC: “There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart. A new pricing survey of products sold at the world’s largest retailer showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate.” Many things would be changed for the better if people in the government shopped at Walmart. With wages and benefits averaging better than $120,000 a year for each federal government employee,...

Journal Editorial Board Video on FNC: Sarah Palin "Leading the World" on Reforming Monetary Policy Karl Rove On Hannity: Palin Gave "Very Impressive Speech" on Quantitative Easing

Journal Editorial Board Video on FNC: Sarah Palin "Leading the World" on Reforming Monetary Policy Karl Rove on Hannity: Palin Gave "Very Impressive Speech" on Quantitative Easing

If you think our economy is in bad shape now, just wait. To be sure, economic prospects for jobs and growth already are bleak, and the Obama administration has increased the national debt in less than two years from over $10.632 trillion in January 2009 to $13.561 trillion in September 2010, resulting in a record 30% increase in public debt. But fear not. Some of our brightest leaders have got the perfect solution to all these problems: "Charles Evans, president of the Federal Reserve Bank of Chicago, called for the Fed to do more to charge up the economy, including...

There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart. A new pricing survey of products sold at the world’s largest retailer [ WMT 54.13  -0.21 (-0.39%) ] showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate. The “inaugural price survey shows a small, but meaningful increase on an 86-item grocery basket,” said Patrick McKeever, MKM Partners analyst, in a note. Most of the items...

The Fed's printing press, explained by a cartoon. Awesome.

Great, funny video explaining Quantitative Easing 2: http://www.youtube.com/watch?v=PTUY16CkS-k&feature=player_embedded

From http://www.cnbc.com/id/40135092 "There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart. A new pricing survey of products sold at the world’s largest retailer [WMT 54.13 -0.21 (-0.39%) ] showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate...."

What the Federal Reserve is up to, and how we got here. (6:48)

I get that you might have a difficult time believing that Sarah Palin was right on the whole "quantitative easing is a really bad deal" thing, Barack, but would you believe, say, the entire G-20 summit when it turns out they aren't so excited about your plan to print tons of money and keep the value of the dollar so as to gain the upper hand in international trade. Leaders of 20 major economies on Friday refused to endorse a U.S. push to get China to let its currency rise, keeping alive a dispute that has raised the specter of...

......This is risky business. We know that history is littered with the economic carcasses of nations that incorporated this as a regular central bank practice. So how can the decision made last Wednesday be justified?....

It is a war of words, because words stand for ideas. Winston Churchill said that history would be kind to him, because he would write it. Inflation is not coming, it is here. Perhaps calling debasement of the currency “Quantitative Easing” has allowed the government hand of inflation slip into our pockets a little bit less noticed than in the 1970’s. The dirty secret, however, is not what the Fed has been calling it. The Consumer Price Index, used almost universally to measure inflation, does not recognize inflation when packages have been “Obamasized”: That’s because of how the CPI—the Consumer...