freshjiva
05-26-2010, 07:44 AM
http://finance.yahoo.com/news/Fed-boss-Fed-must-be-free-apf-3374046292.html?x=0&sec=topStories&pos=5&asset=&ccode=
As governments move ahead on reforms to prevent another global financial crisis like the one in 2008, Bernanke stressed the importance of the Fed and central banks in other countries maintaining their independence over setting interest rates, known as monetary policy.
The Fed, for instance, often must make decisions such as boosting rates to keep inflation in check that are unpopular with politicians but are necessary for a healthy economy.
Politicians generally prefer holding interest rates low, which stimulate the economy and hiring.
How about market-driven rates? One that neither central bankers nor politicians set? Oh, that's right -- the free market leads to volatility and shark-like market participants who take advantage of others. They need to be regulated! Nevermind! :rolleyes:
"Such gains may be popular at first, and thus helpful in an election campaign, but they are not sustainable and soon evaporate, leaving behind inflationary pressures that worsen the economy's long-term prospects," Bernanke said in a speech at a conference in Tokyo on the future of central banking in a globalized economy.
Yeah, you don't need to tell us that, Bernanke. Its what your Fed actually did from 2002 to now -- artificially low interest rates. Now we see the inflationary spending, dropping real estate prices, and market volatility.
"Thus political interference in monetary policy can generate undesirable boom-bust cycles that ultimately lead to both a less stable economy and higher inflation," he said.
Yes, since we certainly don't have anything like a boom-bust business cycle at all. Such occurrences are foreign to me. Thanks Bernanke!
Bernanke said the Fed's emergency loan program to banks also should be free of political interference. For years, the Fed -- as a lender of last resort -- has made low-cost loans to banks when they couldn't get financing elsewhere. The identities of banks drawing the loans aren't made public for fear of causing a run on the institution and defeating the purpose of the backstop.
By 'free of political influence' I think you really mean secret, back-door deals, right Bernanke? Kinda like the 2008 bank bailouts when you won't even name names on the recipients of TARP? Distortion of Free Markets 101.
Earlier this month, the Fed revived a program with other central banks to swap currencies. The Fed is lending much-in-demand dollars to other central banks in exchange for their currencies. In turn, the central banks can lend the dollars out to banks in their home countries to prevent financial crises from spreading.
Why do the European central banks need dollars? I don't understand the point of exchanging euros for dollars to address a sovereign debt crisis..:confused: Maybe because Bernanke sees the Euro strengthening down the road and so the swap was considered a good deal for the Fed? Who knows.
These shenanigans really have to end. Free markets are not that complex, Mr. Central Bankers. Regulation and central banking only distort organic economic growth.
As governments move ahead on reforms to prevent another global financial crisis like the one in 2008, Bernanke stressed the importance of the Fed and central banks in other countries maintaining their independence over setting interest rates, known as monetary policy.
The Fed, for instance, often must make decisions such as boosting rates to keep inflation in check that are unpopular with politicians but are necessary for a healthy economy.
Politicians generally prefer holding interest rates low, which stimulate the economy and hiring.
How about market-driven rates? One that neither central bankers nor politicians set? Oh, that's right -- the free market leads to volatility and shark-like market participants who take advantage of others. They need to be regulated! Nevermind! :rolleyes:
"Such gains may be popular at first, and thus helpful in an election campaign, but they are not sustainable and soon evaporate, leaving behind inflationary pressures that worsen the economy's long-term prospects," Bernanke said in a speech at a conference in Tokyo on the future of central banking in a globalized economy.
Yeah, you don't need to tell us that, Bernanke. Its what your Fed actually did from 2002 to now -- artificially low interest rates. Now we see the inflationary spending, dropping real estate prices, and market volatility.
"Thus political interference in monetary policy can generate undesirable boom-bust cycles that ultimately lead to both a less stable economy and higher inflation," he said.
Yes, since we certainly don't have anything like a boom-bust business cycle at all. Such occurrences are foreign to me. Thanks Bernanke!
Bernanke said the Fed's emergency loan program to banks also should be free of political interference. For years, the Fed -- as a lender of last resort -- has made low-cost loans to banks when they couldn't get financing elsewhere. The identities of banks drawing the loans aren't made public for fear of causing a run on the institution and defeating the purpose of the backstop.
By 'free of political influence' I think you really mean secret, back-door deals, right Bernanke? Kinda like the 2008 bank bailouts when you won't even name names on the recipients of TARP? Distortion of Free Markets 101.
Earlier this month, the Fed revived a program with other central banks to swap currencies. The Fed is lending much-in-demand dollars to other central banks in exchange for their currencies. In turn, the central banks can lend the dollars out to banks in their home countries to prevent financial crises from spreading.
Why do the European central banks need dollars? I don't understand the point of exchanging euros for dollars to address a sovereign debt crisis..:confused: Maybe because Bernanke sees the Euro strengthening down the road and so the swap was considered a good deal for the Fed? Who knows.
These shenanigans really have to end. Free markets are not that complex, Mr. Central Bankers. Regulation and central banking only distort organic economic growth.