Skip to comments.Fed's Plosser 'very worried' about QE consequences
Posted on 03/06/2014 8:18:26 AM PST by Red in Blue PA
Philadelphia Federal Reserve President Charles Plosser is "very worried" about the potential for unintended consequences of the Fed's massive quantitative easing program.
Plosser told CNBC that the U.S. was still suffering from "lasting effects" of the recession and "may never return" to its previous growth ratesand warned that policy should not bet on growth returning to previous rates, saying it could be "many, many years."
(Read More: Fed's Plosser: We need to begin to get rid of QE)
With gross domestic product expanding at a 2.4 percent annual rate, according to the Commerce Department last Friday, Plosser said that the country was "pretty close" to its steady state growth and may never get back to where it once thought it could be. "To keep trying to think that we're going to do that, means that we keep trying to overplay our hand in terms of policy," he added.
(Excerpt) Read more at cnbc.com ...
The bankster motto is; I've got mine, where's yours? Oh yeah, I've got yours to!
That’s unexpected. Does this mean we can’t continue spending money we don’t have forever without adverse consequences? Who would have guessed that there is no free lunch or that our children and grandchildren would be stuck with the bill for Obama’s wasteful spending binge?
Plosser, born 1948, is 65 years old. Likely he’ll be quietly retired for speaking out and a progressive Wall Street insider will be appointed to take his place.
The people of the fed have a pretty good idea what's going to happen - they not stupid. They know the knife's gonna hit the ground - and they know they can't catch it while it's falling...
The big banks have been forced to place excess funds on their balance sheets, and the feds are paying the banks interest on the money to keep the funds from entering the money supply.
Last fall, the total excess fed funds held by the banks was $1.8 trillion.
If these funds ever get released from the banks into the money supply, the inflation suffered under Jimmuh Carter will seem like child’s play.
It shouldn’t have been started in the first place, and now, it’s too late (bond collapse, rising yields preceding skyrocketing, contagious interest rates, activity comes to a halt, market crashes, investor haircuts, pensioner haircuts and so on). We needed more manufacturing.
And dollar crash, with oil staying up because of some continuing activity in the east (manufacturing and trade established between other countries).