Thursday, December 24, 2009

What Danger, Cut Off the Fed's Hands!

"How much should we worry about inflation? In the coming year, nearly all economists say 'not much.' ... Looking beyond next year, though, the question is beginning to take on greater weight, especially amid recent congressional challenges to the [Fed's] authority and independence in conducting monetary policy. ... More important, the Fed's credibility as an inflation fighter, which is crucial to its ability to make effective policy, may be at risk. ... Rock-solid inflation-fighting credentials are the chief reason why the Fed has been able to run a wildly expansionary policy while keeping long-term interest rates low and avoiding a collapse in the dollar", James Cooper at Businessweek, 7 December 2009.

"The US [Fed] is one unloved central bank. ... But anger toward the Fed is running so hot that the organization will probably have to take some kind of hit to appease the public and lawmakers. The question is where it's most willing to concede ground. ... For the Fed, what makes this period so dangerous is that the central bank has become a lightning rod for the severe recession and the huge bonuses going to Wall Street bankers who helped cause the mess", my emphasis, Peter Coy at Businessweek, 14 December 2009.

Cooper and I live in alternative universes. The Fed has no credibility. Only China, Japan and a few other countries hold up the dollar. If they stop, it will crater. This article was titled "The Danger in Tying the Fed's Hands". I see no danger in that. I think its hands should be cut off, like certain Islamic countries do to thieves.

This is amazing. How many divisions has Zimbabwe Ben? The Fed is a creature of Congress. Congress can kill it.


Jr Deputy Accountant said...

Congress can always use the "abuse excuse" when it is tried for the Fed's murder.

Seriously? They don't even know they own it, how can they kill it?

Anonymous said...

Well yes... but... Chris Dodd.

Dodd... Tool of the big banks.

What instructions has he been given by his puppetmasters?

The banks say "make a great theatrical fuss over stripping consumer oversight from the Fed... we'll moan and scream in public". Then pretend to give ground and compromise by allowing the Fed to remain bank holding company supervisor.

Dodd... a nothingburger... he wants to get this done early in the year so the banks can fill up his campaign coffers for the fall election ...