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Bernanke Gives Fed Economy Outlook Speech

September 8, 2011 by  

Bernanke Gives Fed Economy Outlook Speech

Federal Reserve Chairman Ben Bernanke announced on Thursday afternoon that the central bank is prepared to implement “tools” for economic stimulus this month. Possibly waiting for the President Barack Obama’s economy speech later that evening, the Chairman was vague about measures that may be taken.

“In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. My FOMC (Federal Open Market Committee) colleagues and I will continue to consider those and other pertinent issues, including, of course, economic and financial developments, at our meeting in September and are prepared to employ these tools as appropriate to promote a stronger economic recovery in a context of price stability,” Bernanke said during his speech.

The Chairman said that he and members of the Federal Open Market Committee (FOMC) expect moderate economic growth in coming months, but will provide further “forward guidance” to stimulate the economy. Bernanke said that recessions such as the current one have traditionally ended with very little government intervention, but that the current recession is an extraordinary circumstance.

“Why has this recovery been so slow and erratic? Historically, recessions have tended to sow the seeds of their own recoveries as reduced spending on investment, housing, and consumer durables generates pent-up demand,” Bernanke said.

He believes that while it is “far less robust than was expected,” recovery is taking place.

“These restorative forces are at work today, and they will continue to promote recovery over time. Unfortunately, the recession, besides being extraordinarily severe as well as global in scope, was also unusual in being associated with both a very deep slump in the housing market and a historic financial crisis. These two features of the downturn, individually and in combination, have acted to slow the natural recovery process,” he said.

Bernanke also said that his team expects inflation to level out after having reached historically high rates over the past several months.

“…[I]nflation is expected to moderate in the coming quarters as these transitory influences wane. In particular, the prices of oil and many other commodities have either leveled off or have come down from their highs. Meanwhile, the step-up in automobile production should reduce pressure on car prices. Importantly, we see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy,” he said.

The Federal Reserve speech came hours before Obama’s expected announcement of measures to grow jobs through massive public works projects.

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  • Raggs

    Well here we go folks yet another spending spree by the Socialist in cheif… We have to pass the bill to find out what is in it and if the GOP refuses we will call them names like terrorist and un-american.. But who gives a chit it the economy sucks?? Damm sure not oblama the only F-in thing that he cares about is getting votes from the losers that elected his sorry ass in the first place.

  • DanB

    “far less robust than was expected,”

    Explanation is easy. You INTERVENED. That is why it slower than expected. Of course, we live in a society that now believes government is your friend and the solution to all our problems. Short on cash, how about some quantitative easing? Market bubbles popping got you down, how about zero or near zero interest?

    If the Fed was just a bank, only a bank, did not get into manipulating the markets, and stayed out of politics, then we would be doing a whole lot better as a country. But, they try to fix what will fix itself. They try appease the politicians. Does your local bank involve itself in manipulating markets? Or if you city or county is broke and out of cash, does your local bank say “we know you are not good for the money, but here is some more cash anyways”?

    However, auditing the Fed is not the solution. It might wake people up, but it will fix nothing. The problem isn’t the Fed. The problem is us, the people. What power does your bank have over you if you don’t need the money? Think about it. If you can pay cash for what you need, then the bank will have to offer you excellent terms. Because the bank makes money on your loans, they want you indebted to the bank. It is not your savings account they really want. So when we live within our means, we actually have freedom and the bank will actually be our friend instead of our captor. So if we actually balance the federal budget, the state budgets, the city and county budgets, if we balance our personal family budgets, the power of the Fed will fade. It will still be there, and they will still have power, but we will have taken our freedom back and their power will be limited to that which we grant them. So while many argue that disbanding the Fed will save America, I disagree. For until we fix our spending problem, we will always be a captive. Only when we change our habit as a people, as communities, as a nation, only then can we be free of the Fed (and we wouldn’t even have to disband the Fed to do it).

    That is why the Fed policies are often ones that encourage bubbles, that encourage unsound investing, because it is in their self-interest to preserve a balance of power that justifies what they do to manipulate the markets and appease the politicians. When we change our habits as individuals, we then will expect better of our counties, cities, and states. This will give our counties, cities and states freedom from the federal government as well as market manipulations from the Federal Reserve. And as this all filters up, it will change the federal government and that will then strip away the political power of the Federal Reserve and it will then become merely a bank with the power to print money. First we must start at our homes, with ourselves, our counties, our cities, and our states. For as we learn financial freedom, financial freedom can be ours. But if we don’t learn financial freedom, it doesn’t matter if we rise up against our current master for we will only replace them with another that gives us pleasing words….

  • FreedomFighter

    End the Fed

    Laus Deo
    Semper Fi

    • Raggs

      I will raise that with end the IRS..

  • Jon

    Search Google for: Bush Signed Afghanistan Invasion The Day Before 9/11!

  • s c

    Bernanke has a luxury that Obummer will never have. Bernanke works for people who, combined with the power of the Fed, tell a prez what he can and can’t do. It’s no different than the tail wagging the dog.
    Alan Greenspan perfected the non-English that Fed zombies use to dumb-down and sedate the people. When it comes to ‘forward guidance,’ Bernanke might as well say ‘ we have the power, and you do what we say.’ That is, YOU work for US .
    All wealth belongs to the FED. We are but unwilling ‘donors’ who keep manipulated ‘businesses’ and Uncle Scam swimming in dollars (temporarily).
    Let a prez try to defy ‘advice’ from the Fed, and there can be one result (another prez) – one way or another. People, if you think politicians are shifty and can’t be trusted, you haven’t dug deep enough. Central bankers wrote the book. Politicians simply try to act the part of power-brokers. A world without central bankers would be like a world with crime, politics, unending greed or poverty.

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