sailingaway
09-22-2012, 09:11 AM
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Nicholas Biddle
In a week that the Middle East lit aflame and the world seemed on the brink of war and chaos, the Federal Reserve announced that it would begin its third round of quantitative easing (QE3) since the economic collapse of 2008. The strategy is to keep interest rates at a bare minimum and “open ended” buying of mortgage backed securities, which is intended to enlarge the amount of cash available, increase liquidity, and stimulate the economy. Most conservative and libertarian economists see this as potential inhibitor to real economic grown at best and also a dangerous flirtation with hyperinflation.
Immediately after the QE3 announcement, stocks and commodities shot up in value. This could, of course, give a short-term and hollow boost to the economy just before the November presidential election. While it is impossible to say whether or not the decision to engage in quantitative easing at this time was used for political purposes, it will most likely have at least some political effect and many Americans will see it that way.
http://www.humanevents.com/wp-content/uploads/2012/09/bernanke_ben.jpg
Benjamin S. Bernacke
Federal Reserve Chairman Ben Bernanke stands out as the bland but seemingly arrogant face of the America’s central bank, and he has drawn the ire of Americans who, in increasing numbers, see the Federal Reserve as an institution with too much power, too little oversight and is far from being removed from politics as the Fed was originally intended to be.Republican primary contender, Texas Gov. Rick Perry, made news earlier this year when he said of Bernanke, “If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.”
While the statement was derided by the liberal press, it was one of the few highlights of Perry’s campaign and delighted many conservatives.
Since it was enacted in 1913, at the height of the progressive era, the Federal Reserve has acted as America’s central bank, regulating the banking system, U.S. currency and acting as the lender of last resort to American banks. The Fed’s role has become increasingly important and entrenched in the American and world economic system, and its power has increased significantly, especially after the gold standard was retired in 1971.
The Federal Reserve was, until very recently, an institution that was solidly backed by both Republicans and Democrats. The major exception was Rep. Ron Paul (R.-Tex.), who has been on a 30 year plus crusade to “end the Fed” and reinstitute the gold standard or bimetallism. But now the Republican Party platform calls for an audit of the Fed, which, if successful, would be the first time it will be audited since the institution was created. The GOP platform has also called for a gold commission—last issued in the 1980’s under President Ronald Reagan—to explore whether going back to a gold standard is possible. Even Steve Forbes has examined the gold standard as of late.
A few major noted failures of the Fed in 20th Century, the current policy of seemingly printing endless amounts of money, a few scandals occurring under its watch and the increasing belief that the institution is not nearly as removed from politics as the general population thought it was, may instigate a major fight over the Fed’s function and even existence.
All these forces in play surrounding the Federal Reserve are reminiscent of the same forces that brought down America’s last central bank, the Second Bank of the United States (BUS), in 1836.
more at link: http://www.humanevents.com/2012/09/21/bernanke-he-fed-dooming-themselves-like-biddle-the-second-bank-of-the-united-states/
Nicholas Biddle
In a week that the Middle East lit aflame and the world seemed on the brink of war and chaos, the Federal Reserve announced that it would begin its third round of quantitative easing (QE3) since the economic collapse of 2008. The strategy is to keep interest rates at a bare minimum and “open ended” buying of mortgage backed securities, which is intended to enlarge the amount of cash available, increase liquidity, and stimulate the economy. Most conservative and libertarian economists see this as potential inhibitor to real economic grown at best and also a dangerous flirtation with hyperinflation.
Immediately after the QE3 announcement, stocks and commodities shot up in value. This could, of course, give a short-term and hollow boost to the economy just before the November presidential election. While it is impossible to say whether or not the decision to engage in quantitative easing at this time was used for political purposes, it will most likely have at least some political effect and many Americans will see it that way.
http://www.humanevents.com/wp-content/uploads/2012/09/bernanke_ben.jpg
Benjamin S. Bernacke
Federal Reserve Chairman Ben Bernanke stands out as the bland but seemingly arrogant face of the America’s central bank, and he has drawn the ire of Americans who, in increasing numbers, see the Federal Reserve as an institution with too much power, too little oversight and is far from being removed from politics as the Fed was originally intended to be.Republican primary contender, Texas Gov. Rick Perry, made news earlier this year when he said of Bernanke, “If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.”
While the statement was derided by the liberal press, it was one of the few highlights of Perry’s campaign and delighted many conservatives.
Since it was enacted in 1913, at the height of the progressive era, the Federal Reserve has acted as America’s central bank, regulating the banking system, U.S. currency and acting as the lender of last resort to American banks. The Fed’s role has become increasingly important and entrenched in the American and world economic system, and its power has increased significantly, especially after the gold standard was retired in 1971.
The Federal Reserve was, until very recently, an institution that was solidly backed by both Republicans and Democrats. The major exception was Rep. Ron Paul (R.-Tex.), who has been on a 30 year plus crusade to “end the Fed” and reinstitute the gold standard or bimetallism. But now the Republican Party platform calls for an audit of the Fed, which, if successful, would be the first time it will be audited since the institution was created. The GOP platform has also called for a gold commission—last issued in the 1980’s under President Ronald Reagan—to explore whether going back to a gold standard is possible. Even Steve Forbes has examined the gold standard as of late.
A few major noted failures of the Fed in 20th Century, the current policy of seemingly printing endless amounts of money, a few scandals occurring under its watch and the increasing belief that the institution is not nearly as removed from politics as the general population thought it was, may instigate a major fight over the Fed’s function and even existence.
All these forces in play surrounding the Federal Reserve are reminiscent of the same forces that brought down America’s last central bank, the Second Bank of the United States (BUS), in 1836.
more at link: http://www.humanevents.com/2012/09/21/bernanke-he-fed-dooming-themselves-like-biddle-the-second-bank-of-the-united-states/