Posted on 10/06/2009 8:02:28 AM PDT by BenLurkin
The Federal Reserve is now faced with a challenge that is akin to threading a needle by throwing a spool of thread across a football field. It is attempting to keep loose money and quantitative easing policies in place long enough not to stymie the nascent recovery while pulling them back in time to avoid massive inflation. It's a Hail Mary pass with an impossibly small target while facing a blitz.
In today's Wall Street Journal, Nouriel Roubini and Ian Bremmer lay out a series of policy prescriptions for how they think the Fed might be able to avoid creating another dangerous asset bubble without triggering a double-dip recession. They are very clear that this is an enormously difficult task--but even their assessment might be too optimistic.
Here's the problem. They agree that the operations of the Federal Reserve need to be subject to political review because it is clear that the New York Fed has been captured by Wall Street. The Fed's worries about its independence being compromised make no sense when it seems that its independence is already compromised to the our powerful financial firms.
But Congressional oversight is likely to result in pressure to keep monetary policy too loose for too long. There will be intense political pressure to repeat the "fateful mistake" of the last recession, keeping monetary policy too easy for too long.
Is there are way out? Unfortunately, the way out may be the way back. The government, including the Fed, need to restore the credibility of market processes by letting a too big to fail institution go insolvent. In short, we need another Lehman. And a policy that depends on failure to succeed is certainly not a happy one.
(Excerpt) Read more at finance.yahoo.com ...
That is one of the funniest things I have seen!! Paulson’s head would have done well with Helicopter Ben too. :)
Oooh Paulson’s head... good idea!
I added him...
Wait for the refresh and reload or look here:
http://www.pbase.com/wm25burke/image/118003588
Ha!!
LoL! yep!
The US dollar index peaked at about 88 in March, now it's about 76.3. About a 14% drop. And only on your foreign purchases. Most people still buy most of their stuff in dollars from American producers.
You can see from these two things alone the massive amount of inflation that we have had over the past year.
Over the past year, we've had deflation.
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