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Thread: Economists Warn Fed Risks Losing Control Amid Budget Deficits

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    Default Economists Warn Fed Risks Losing Control Amid Budget Deficits

    Four economists, including a former Federal Reserve governor who has co-written research with Chairman Ben S. Bernanke, warned that losses from the central bank’s more than $3 trillion balance sheet could lead to the Fed losing control of monetary policy.

    “The combination of a massively expanded central bank balance sheet and an unsustainable public debt trajectory is a mix that has the potential to substantially reduce the flexibility of monetary policy,” the economists write. “This mix could induce a bias toward slower exit or easier policy, and be seen as the first step toward fiscal dominance. It could thereby be the cause of longer-term inflation expectations and raise the risk of inflation overall.”

    The conclusion from economists, including Frederic Mishkin, a governor at the central bank from 2006 to 2008 and an academic collaborator with Bernanke before that, will be presented at the U.S. Monetary Policy Forum in New York. Their paper serves as a high-profile warning to an audience including Boston Fed President Eric Rosengren, Fed Governor Jerome Powell and St. Louis Fed President James Bullard.



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    Contributing Member Henry Rogue's Avatar
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    losses from the central bank’s more than $3 trillion balance sheet could lead to the Fed losing control of monetary policy.
    Does this mean we have to bailout the Fed too? Of course we will have to borrow the money from them in order to bail them out.
    Last edited by Henry Rogue; 02-23-2013 at 10:03 PM.
    Peace.

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    It is going to happen - we just don't know when.
    Out of every one hundred men they send us, ten should not even be here. Eighty will do nothing but serve as targets for the enemy. Nine are real fighters, and we are lucky to have them, upon them depends our success in battle. But one, ah the one, he is a real warrior, and he will bring the others back from battle alive.

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    Quote Originally Posted by Pericles View Post
    It is going to happen - we just don't know when.
    Merica'
    "Life, Liberty and the pursuit of Happiness"

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    Member DamianTV's Avatar
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    Hmmm, another large contributing factor as to why the price of gas shot up 50 cents a gallon in two weeks. Back over 4 bones a gallon here...
    1776 > 1984

    The FAILURE of the United States Government to operate and maintian an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

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  7. #6

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    it's too late now you morons!

  8. #7

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    Just let the DoD bail um out. Sooner or later they will figure out which mattress they "misplaced" that 3.5 Trillion under.

    -t
    Public education is not education ... it is schooling.
    Our military is not defense ... it is warmongering and empire building.
    Government police do not protect ... they control.
    Regulations do not regulate ... they protect the status quo.
    Government banks do not distribute money based on effort ... it is gifted to close friends ... and some of it trickles down.

    The result is war, poverty, fear, chaos, and hopelessness for most people with abundance for a few elite.
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    Member purplechoe's Avatar
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    "I have never let my schooling interfere with my education." - Mark Twain

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