Bernanke Asset Purchases Risk Unleashing 1970s Inflation Genie!

Woo hoo here comes Helicopter Ben Bernanke! We'll all be Quadrillionaires but can't afford breakfast!

• Quantitative Easing to raise asset prices is the stupidest idea. Helicopter Ben Bernanke will go down in history as Professor of Zimbabwean School of Economics. This is what it is coming down to: to boost economic growth, you manipulate prices, you stir inflation… The dumbest of the dumb idea.
   
• By stirring inflation, people will lose confidence in the USD and everyone will dump/spend it. What kind of crock economic theory is this? Casino economics! Illuminist snakes are obviously hiding their real intent: the destruction of the USD leading to a global currency crisis. They will bring out their One World Currency, Global Central Bank and World Government out of this global chaos. Got Gold yet, people? Gold is your financial insurance through this madness!
    
• The article below has quite a bit of official propaganda/lies. The biggest lie is to put spending above savings and thus investment. It is putting the cart before the economic horse. Spend money first to boost economy and thereafter get a job. People need to have jobs, savings and then they can spend. Of course, these economic high priests believe that you can borrow and spend your way out of poverty. These are economic heretics. What ever happened to the fundamental tenets of central banks: Ensure Price Stability and Sound Money?! Now it is: Inflation and Currency Debasement! Are we suppose to kowtow to all these economic heretics, nut jobs?
   
  Bernanke Asset Purchases Risk Unleashing 1970s Inflation Genie
  For the second time since he became chairman in 2006, Ben S. Bernanke is leading the Federal Reserve into uncharted monetary territory. Bernanke next week is likely to preside over a decision to launch another round of large-scale asset purchases after deploying $1.7 trillion to pull the economy out of the financial crisis, comments from policy makers over the past week indicate. This time, with interest rates already near zero, the Fed will be aiming to increase the rate of inflation and reduce the cost of borrowing in real terms. The goal is to unlock consumer spending and jump-start an economy that’s growing too slowly to push unemployment lower.
   
  Estimates for the ultimate size of the asset-purchase program range from $1 trillion at Bank of America-Merrill Lynch Global Research to $2 trillion at Goldman Sachs Group Inc., with economists at both firms agreeing the Fed will likely start by announcing $500 billion after the Nov. 2-3 meeting. The danger is that once the Fed kindles price increases, inflation will be difficult to control.
   
  “By reducing real interest rates and trying to break the psychology of ‘Why spend today when I can buy goods cheaper tomorrow,’ they are hoping to drive growth that would be more commensurate with a pickup in employment,” said Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York. “The risk is a late 1970s type of scenario where the inflation genie gets out of the bottle.”
   
  The U.S. Treasury Department yesterday sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Fed will be successful in sparking inflation. The securities drew a yield of negative 0.55 percent.
   
  ‘Unacceptable’ Inflation
  William Dudley, president of the New York Fed and vice chairman of the Federal Open Market Committee, yesterday repeated that current levels of inflation and a 9.6 percent unemployment rate are “unacceptable” and said the Fed needs to take action, even though expanding the balance sheet isn’t a “perfect tool.”
   
  “To the extent that we can do things to improve the economic environment, we certainly owe it to the millions of people who are unemployed to do so,” Dudley said in response to audience questions after a speech in Ithaca, New York. Policy makers haven’t yet decided whether to buy additional assets, he said.
   
  A second jolt of monetary stimulus would expand the Fed’s $2.3 trillion balance sheet to a record and likely work through the exchange rate as well as interest rates, said former Fed governor Lyle Gramley. A weaker dollar would boost U.S. exports and push prices higher as the cost of imported goods rises.
   
  Competitive Exports
  “It is a channel that works not only from the standpoint of encouraging more growth and making exports more competitive, but if you’re worried about inflation getting too low, this tends to put a little upward pressure” on it, said Gramley, a senior adviser at Potomac Research Group in Washington.
   
  An index of the dollar versus six major currencies is down 5.2 percent since Sept. 20, the day before Fed officials concluded their last meeting by saying inflation measures were “somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.” The Standard and Poor’s 500 Index is up 3.8 percent since then.
   
  A 10 percent decline in the dollar in the first six months of next year would push the economy above estimates of trend growth, moving indicators on inflation and employment more rapidly toward the Fed’s policy goals, according to a simulation run by Macroeconomic Advisers LLC on their model of the U.S. economy.

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