Posted on 09/03/2009 4:23:11 AM PDT by Red in Blue PA
The Federal Reserve will have to raise interest rates as aggressively as it cut them when it becomes clear the economic recovery has taken hold, to avoid flaring up inflation, Charles Plosser, president of the Philadelphia Fed, told CNBC in an interview.
Analysts have been worried that the various stimulus programmes and money-printing around the world will cause devaluation and price rises, and some European officials have suggested that all stimulus measures be pulled out at once to prevent that.
The Fed has an exit strategy, which it will apply when needed, Plosser said.
"Our exit strategy is really quite simple: we have to begin to pull back from our extraordinary programs, we have to begin to shrink our balance sheet, otherwise we will feel inflation in the months and years ahead," he said.
(Excerpt) Read more at cnbc.com ...
As silver bolts above 15. Nahh there is no inflation.
So, the Fed does have an exit Strategy.
This will come as a surprise to Ben Bernanke.
He has been unable to articulate one for months.
Inflation is going to go thru the roof for fundamental reasons, and will not flinch at meagre attempts to be fooled by timing of some interest rates. The trillion dollar spending spree of future money will guarantee it.
Somehow I don’t have much of a fear that our economy is going to explode anytime soon. There is not stimulus in the stimulus. But yes, the stimulus has no purpose and should be killed as soon as possible.
......Inflation is going to go thru the roof......
My view is that the coming inflation is designed to provide salvation. The deficit will be inflated away. The trick is to maintain it at the maximum possible rate level that will be tolerated without revolution.
Our “leaders” seem to think psychology trumps math.
“As silver bolts above 15. Nahh there is no inflation.”
The 24 hour Spot Chart for Silver is at 15.8 right now.
Hmmm. Better than expected.
OMG< I will never forget that time. It was heaven when Reagan came in and took over.
I look at the dollars flowing into the economy from the fed and it’s hard for me to not conclude that dollars will become extremely devalued at some point. If the fed raises interest rates what does it do to the interest payments on America’s debt? How much of the debt is fixed interest and how much of it is adjusted?
We’re now up to 15.820.
If you have a money machine. The debt does not matter. No one in their right mind can possibly think we can pay it off in todays dollar. They will continue the Ponzi as long as they have ink and paper.
No they won't.
First, it would be logical to raise rates when inflation kicks up, not necessarily when a recovery starts. They are just wishing and hoping that a recovery will start. Remember stagflation?
Second, Big Brother now needs to devalue that giant $9 trillion debt, so it is the governments interest to allow double digit inflation to go on for some time. Of course this will destroy the value of your liquid assets.
I'm seriously considering putting most everything into hard asset categories.
>> The deficit will be inflated away.
The problem is, so very much government spending is on mandates (SS, medicare, soon health care?)
If inflation runs rampant, you either a) increase benefits to compensate for inflation — and there goes your deficit reduction, or b) create massive pain among those who are least able to cope with it — and here comes your revolution.
Pensioners and those on fixed income will be brutalized also — and they will be screaming for “relief” by the government.
Profligacy is a no-win path. The chickens will come home to roost, and inflation will not be a savior, it’ll be a demon.
“If you have a money machine. The debt does not matter. No one in their right mind can possibly think we can pay it off in todays dollar. They will continue the Ponzi as long as they have ink and paper.”
The current US policy is straight from the Robert Mugabe school of economics.
Although what you say may be true, rulers have been following the inflation route since the beginning of time. History is definitely on the side of inflation.
hyper inflation is coming. More green shoots
Which will bring the housing recovery to a screeching halt, affecting all the related services and sales of goods it generates, which will affect the businesses providing goods and services to THOSE businesses, which will result in more layoffs...
Followed by government bailouts and programs to make more people dependent upon them...yes, comrades; the plan to destroy capitalism is on track!
Not a matter of if..when. Silver lining. It is bankrupting Socialist Government.
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