Posted on 11/06/2010 11:13:32 PM PDT by TigerLikesRooster
Volcker: Fed Plan an Illusion, Won't Boost Economy
Friday, November 5, 2010 10:37 AM
Former Federal Reserve Chairman Paul Volcker says the U.S. central bank's plan to buy hundreds of billions of dollars in government bonds probably won't do much to boost the economic recovery.
The Fed announced Wednesday that it would purchase $600 billion in Treasurys, aiming to lower long-term interest rates in an effort to spur spending and ultimately lower the U.S. unemployment rate, currently at 9.6 percent. The move comes on the heels of previous purchases of $1.7 trillion in mortgage and Treasury bonds.
Volcker told a business audience in Seoul that the Fed's bond plan is obviously an attempt to spur the U.S. economy but "is not the kind of action that's likely to change the general picture that I've described as slow and labored recovery over a period of time."
(Excerpt) Read more at moneynews.com ...
P!
Heh.
So far, all the critics of Bernanke’s QE2 have been shouted down by Bernanke supporters as being ignorant of the issues the Fed is grappling with.
That diversion cannot be used to deflect these remarks from Volcker.
It’s ok. The American people have an attention span of about 10 days. Usually just ignore things and move on and they will forget about what you did or tried to do.
For example: Anyone you know still talking about the attempt to move the 9/11 hijacking trial to NYC?
I’m with you brother. DOOM!
Inflation is something that even college kiddies and union workers will have to face every single day. FDR could survive a decade of unemployment but Carter was wiped out after just one term of inflation.
“is currently chairman of President Barack Obama’s Economic Recovery Advisory Board.”
What the heck is Volcker’s job anyway? He gives advice for Obama to ignore? I’m serious...what does one do as “chairman of Obama’s economic recovery advisory board” ?
anyone who got in bed with PINO does not have my respect.....
You tutor him, and have him ignore you while using your name.
Keep in mind, that he has not one, not 2, but at least 3 different groups of economic advisors, and from what I read on the heads of 2 of them (Summers, and Romer), it seems like he has no damn clue (and keep in mind, they like him).
“What the heck is Volcker’s job anyway?”
I don’t know either, but if it means he occasionally talks to those in power, then I want him there. He did a great job as Fed Chairman beating inflation when Reagan was president. Let’s hope he brings some sense to the current administration.
“Volcker told a business audience in Seoul that the Fed’s bond plan is obviously an attempt to spur the U.S. economy but ‘is not the kind of action that’s likely to change the general picture that I’ve described as slow and labored recovery over a period of time.’”
Bad news for elected officials—if Volcker is right, then lots of incumbents are going to be voted out of office in the next election cycle. Americans don’t believe in slow and labored recoveries. They want miracles.
As for next election cycle, voters would be further radicalized.
The sentiment is understandable, but Volcker is the only Fed chairman in the history of that execrable institution who cleaned up its mess.
By the time Reagan was elected, inflation was approaching disastrous levels in the US. Mortgages were impossible to get for first-time buyers, car loans were running about 14% and price increases and scarcity had become a way of life.
Volcker clamped down on the money supply -- hard -- and brought inflation under control in a couple years. He did cause a serious recession in doing it, but that's the only way to cure a boom brought on by Fed-made fake money.
I suspect he joined the Obama administration thinking that they really valued his advice. They didn't, which doesn't change the fact that he knows what he's talking about. The next president should appoint him Fed chairman to clean up the mess Bernanke is creating.
P.S. Of course, I'd prefer the Fed were abolished, but that's as likely to happen as killing the Dept. of Education.
Bow lessons?
Illusion=LIE, Something the LIAR in chief is very familiar with.
“What the heck is Volker’s job anyway?”
Volker is a true figure head. He is there only to be brought out of storage and paraded in front of the cameras whenever Obama thinks the Chinese are becoming concerned about buying our bonds.
What is needed right now is a complete renunciation of the QE insanity, a one time inflation shock to get past the debt crisis and then a market-driven rise in interest rates. Until mortgages cost 10% or more, there will be no economic recovery. People need only look at the early 80's, adjustment to the reality of market priced (higher now but lower later) interest rates was difficult but produced an extended boom and much economic and technological innovation until it was undermined by Greenspan and his economically worthless carry trades, financial "innovations", fake spreading of risk, etc.
Partly true, but both presidents had both. FDR in particular created instant 70% inflation by confiscating gold at $20.67 then raising it to $35. Both had in common the intrusion of federal government into large new areas of previously local and private control. Those bring down the economy by eliminating family financial autonomy (SS), pumping up unions, destroying the economic drivers in education, etc.
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