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Fed Chairman Defends Purchase Of Government Debt, Downplays Inflation Fears

December 8, 2010 by  

Fed chairman defends purchase of government debt, downplays inflation fearsThe head of the Federal Reserve has defended the central bank's decision to buy about $600 billion in government debt in an effort to improve the nation's economy.

Ben Bernanke, in an interview on CBS' "60 Minutes," said that the United States is on the "border" of another recession, and more action from the Federal Reserve may be needed to help the economy rebound. The Fed chairman said that it is "certainly possible" that the bank will expand its purchase amount in an attempt to lower the nation's jobless rate and to minimize the risk of deflation in consumer prices.

"At the rate we're going, it could be four, five years before we are back to a more normal unemployment rate. Somewhere in the vicinity of say 5 or 6 percent," Bernanke said during the interview, according to media reports.

Critics of the Federal Reserve's plan believe that the purchase of government bonds is not necessary because there have been signs of improving growth in the U.S. economy. Many financial experts warn that the bank's action could drive up inflation. The Christian Science Monitor reports that investors have already raised the price of gold since the Fed's latest announcement of bond purchases.

In response to Bernanke's televised appearance, the National Inflation Association (NIA) said that the Fed's plan to print more money is going to fund non-productive and wasteful government spending. In a statement, the NIA said that it is more likely that the U.S. unemployment rate will reach Great Depression levels within five years rather than fall, as Bernanke predicted.

The organization believes that Americans should prepare for hyperinflation because of the Fed's "dangerous and destructive actions."

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  • s c

    When you have criminals controlling your money supply, only a fool would call it leadership. Only a retard would appreciate it. Only a useful idiot would worship it and conclude that all countries should live under the thumb of wannabe ‘elites.’
    And some Americans dare to wonder why life is so complex and why things don’t get better. When God said “My people perish for lack of knowledge,” he was NOT complimenting those who call themselves “leaders.”
    It has been said that the most effective form of slavery keeps slaves from seeing themselves as such. HOW does that not apply to America?

    • Al Sieber

      sc, good post, I keep hoping we can get rid of these criminals, I like J.M.R. idea.

  • J.M.R.

    BENANKE IS JUST ANOTHER DICK-TATER MORON HE NEDS TO GO TO JAIL WITH THE REST OF HIS CRIMINALS BETTER YET TRIED FOR TREASON AND PUT IN FRONT OF A FIRING SQUAD

  • TIME

    Sure there’s no inflation, thats why food is now up 20% from 60 days ago, gas is up 12% from 60 days ago.
    Please do keep in mind that as the gas price go up so to will all your food prices and cloths, Power ~ well everything now is that not called “INFLATION?”

    Keep in mind that everthing is interconnected, kind of like you have an electric fan, you need an outlet, and you need power at the outlet, and they all must work together to have an effect.

    Just wait until you get your January 2011 Winter Power bills, then tell me that there is NO INFLATION… And by the way Food should be going up again by at least 15% more by Febuary 2011..

    Good luck with that one Benny.

    • Al Sieber

      TIME, that’s why I have Solar Power, Wind generator’s, a well, a garden, and plenty of wild game, plus 40 acres. but, you have to worry about people heading for the hills where I live,I let a few people here, but you have to be careful. there’s a lot of people living along the Colorado River, 25 miles west of me, living on Govt. land, and you can only live there for 14 days, then you have to move 28 miles. I’m expecting riots pretty soon because the Govt. Rangers are kicking them off. these are the homeless that lost their jobs,homes, everything, etc.the weather is in the 60′s here, moderate in the winter, Brutal in the summer, I’ll keep you posted.

  • kathie

    Be prepared. It could be as little as six months before we see monster inflation based on commodity prices which lag the retail about six months. It is correct that food and fuel have already gone up as mentioned in the first post.
    Better have cash at you home- water purifier/distiller and some food stored. The eliltes know chaos is coming… look at the behavior of the idiots trying to get deals on their christman purchases…

  • CJ

    It’s obvious by some of the early posts here that basic economics is NOT understood. For people to have jobs, a product needs to be made. The Fed’s move to put more cash in circulation (their job is monetery policy only) is intended to get people to spend before the value of their money goes down (inflation). Simply, forced spending to create a need for more jobs. The problem is, what we buy is made in CHINA. That’s why it won’t work. Go to WalMart, Best Buy, Target, or anywhere you seek “value” (ie, cheap) and find something made in the US! Americans only work if US products are being bought. Want to fix the problem… STOP BUYING INPORTED PRODUCTS.

    • Warrior

      And rumors are circulating that China is buying up metals everywhere. Hmmm, what are they up to? Hey, maybe with their new GM partnerships they’re going to build volts. Or, how about some more fun stuff, like military hardware.

    • TIME

      CJ,

      Your point is valid, so let me just toss this hat in the ring.
      Why is it so hard for people to get their heads around this whole gig?

      Lets face it 97% of the population has been in a deep sleep for years, and afterall we do have the Media to blame for some of it.

      So when they do wake up, it hard to fathom that there are so many hands holding them down. As a fellow stated to me last week, “THIS IS THE UNITED STATES and it just CAN’T HAPPEN HERE!” Your crazy!
      Thats what he said to me.

      That mindset is saddly the one that we face on mass, so even if these people get one hand off their throats, there are still thousands of hands still hold them down. But they can’t see that.

      As the jobs left people were happy with early retirement packages, and what seemed like the “good times.” Think Clinton ~ Then as they saw that the money they had just failed to go as far, they got part time jobs, then they needed full time jobs and yet still could not make ends meet.

      Now its to late as we produce little to nothing, why?
      We needed to make our Dollars strech. So when we needed something we went to Walmart and or Target where you could get something that looks like the real thing for 1/3 the cost.
      But that catches up with you after a while as the shift of wealth is being sent out of the Country.

      So all in all we have sat in a pot of cold water all the while it was being heated up, as the heat went higher and hoter we felt better than sitting in cold water, so we spread out.
      Then the water started to get a little to warm and we needed some cool air, but non was to be found, now the water is near a full boil and yet still many sit and want someone to explain whats going on.

      We have done this to ourselfs, comfort, greed and ignorance have nearly won this bloodless war.

      • S.C.Murf

        Good post

      • http://joaisgarden.blogspot.com jfhoffman

        A very good post. After reading the various posts, I was enlightened to find that there truly are concerned citizens out there that possess the knowledge of what our government is doing to us and our nation.

        My only question is, are we truly political knowledgeable to understand the pending dollar crises regarding the World Bank Standard and their efforts to create a new world currency, the ‘Bancor’ and dropping the US Dollar as the world standard. Check out China’s activity in this financial arena. They want to have the ‘yuan’ as a standard.

      • Richard Pawley

        Don’t forget that we have the second highest tax rates on corporations in the world. That has got to be a consideration when the a company wants to expand. If they move to Mexico or Canada or most anywhere else they will get to keep more of what they make. If we had a simple flat tax, the same for everyone, not a progressive tax like the one that was first espoused by Karl Marx who was also opposed to God and marriage and a lot more, then companies and people would be a lot better off.

  • http://MSN.com Alice

    Who can stop Obama? Obama is wrong against our country and people. Black people automatically up roof him because he is half black. Many black people have better life than other ethnic groups.

  • Bill

    No Bernanke is not a moron, he is just plain wrong in what he believes. History does not support his actions, rather it is an inevitable step that all socialist governments take. His actions wiil devalue the dollar by 40 or 50 percent.

    • Richard Pawley

      I’m afraid Bernanke’s actions and those of the Democratically controlled Congress for the past four years and that of the congress before them and the borrowed money they have all squandered is going to cause the dollar to fall a lot more than 40 or 50%. You can count on food and fuel and other things that the government doesn’t consider when they figure inflation to at least TRIPLE. I have absolutely no doubt about that.(This will not apply to housing). I only hope it doesn’t get worse than that. As I said in my last book, quoting someone much smarter than I, it is quite possible that the best gift to give or receive at Christmas in 2012 will be FOOD. A small recent order of freeze dried food that I placed was only 2/3 filled because of a sell out. I have never known that to happen. If you plan for hyperinflation and we only have about 275% you will still be way ahead of the game. If you think things are going to get better before they get a whole lot worse you may well be surprised. IF you don’t overpay you can’t go wrong preparing and having a good pantry. The Central Banks of the world have more far money invested now than the $300 Trillion I warned about in my autobiography LEAVING SOUTH CAROLINA. They need inflation for these to be profitable. They keep telling us how bad deflation is but it is only bad for the banks, not for people whose money is worth more. No nation who has ever done what the Treasury is doing, just printing money out of thin air has ever improved their situation. Not the French in 1789, not the Germans in 1921-23, not Yugoslavia over 20 years ago or Zimbabwe over ten years and or several dozen other countries . This is why Brazil and China and Germany were all upset when they heard we had begun doing this. All are going to be affected by this and it’s why billionaires like George Soros have purchased hundreds of millions of dollars worth of gold. Gold will go at least a couple of hundred dollars higher but I believe that a thousand dollars worth of food that will last for years will go up more than a thousand dollars worth of gold and the worst you can do is that you will save a lot of money by being able to eat your investment. The time to learn about such things is NOW. Regardless of what the parrot media tell you or the talking heads speak of how much better things are going to get – I hope they are right – but food and fuel and clothes and all things we use are going to at least triple. It’s already begun. The 75 thousand million a month that is just being created out of nowhere or thin air virtually assures that. We may have the world over a barrel but many are already trying to get rid of dollars and if you follow currencies at all they are all – eventually – all going the same way. Big time inflation is all but guaranteed

  • http://com i41

    Time, as for an electric fan, you need a plug in, also you need power to the power, deliverted to the power box, coming from a tranformer, from a power grid, coming from a generator, wheather coal, nuke or water. All that the envio radical wing of the socialist democrat party. Trry to see what crap comes out of any green weiny idoits of the demorat party to see where power is going to come from. When windmills are mention ask them if they want them close to their houses, or how this power is going to be transported? Some will use France as an example of more nuke plants, agaian ask the same 2 questions. Then ask how long they think it will take to install the delivery grid and power stuctures? It never fails when the amount of time that is wasted on required mandated surveys, permitting, hearings and more studies are done, before a shovel of dirt is moved, and that is if a freak envior group doesn’t file a frivolus law suit. It all comes back to the crap forced on America, by mentally f–ked envior socialist groups who are arms of the democrat party.

  • Ray

    I agree with what TIME says and I would like to add to that that our health insurance has gone up and we are getting less coverage, electricity has gone up, heating has gone up and there was no reduction on our realestate taxes. AMEN this is not the end of the up side.

  • traderphil

    Hey Folks !! News alert!!! Benny (Ben Bernanke) has shown uo the way out of debt!!!! We are soooooo lucky to have such a BRILLIANT man running the world finances, basically!! LISTEN UP!!!! YOU WANT TO GET OUT OF DEBT?????? JUST SPEND A WHOLE LOT MORE MONEY TO INCREASE YOUR DEBTLOAD!!! How brilliant Ben!! HAHAHHAHHAHHAHAHHAHA Have you EVER HEARD ANYTHING SO BLATANTLY FOOLISH!! And your “leader’ in his wisdom” places him back in control of finances after he has ruined the economy already by indebting America to the point of NO RETURN!!! HELLO?????? Any one home??????? Apparently not!

  • traderphil

    Oh yes, one more thing! The GREEN movement was designed and initiated by the GLOBAL ELITE and they use the GREEN MOVEMENT well! Most grass roots greenies are really interested in maintaining mother earth and protecting her from abuse and really have NO IDEA who runs their movement, really!! . Problem is their real BOSSES are the ones doing the damage, but staying in the background un-noticed, where they rule from!! WHERE were all the GREENIES when the Gulf oil leak happened?????? I didn’t hear anything from them, just like they were told!!! Let’s try to be honest here, ok! Tesla showed us how to use the earth grid for an energy source and could have powered the world with FREE non -ending power but the USA’s JP Morgan and friends KILLED IT TO PROMOTE OIL!!!! Tesla is the man AC current that EVERYONE RELIES ON came from , communication via airwaves, radar, etc, etc, etc, How did the US govt respond to him for creating usable electricity for the masses you might ask??? They tried to Write him out of history !!!!! He died in poverty in a hotel room because he patented his energy design and wouldn’t sell the patent to JP Morgan who wanted to control and sell it t the masses. Tesla wanted his idea of FREE ENERGY to be just that , FREE!!! THAT is the kind of mindset your rulers have!! All they want is money and the real prize, POWER!!!!! In my opinion.

  • Howard Roark

    I am nearly sixty eight and am still working. plan to work until I am seventy or possibly later. When the Social Security Administration stole the first dollar from me in nineteen fifty nine, candy bars were a nickle. I could have bought twenty candy bars with that dollar. at age sixty six the Soc. Sec.system returned that dollar to me and claimed that they had paid me back one hundred percent.dollar for dollar that statement appears to be true. however, today I can only buy two candy bars (if i really look around) with that dollar. I will never get back the buying power that was stolen from me.

    this is how the Soc Sec Administration gets away with the lie that you will get back much more than you ever bpaid into Social Security.

    • JC

      Inflation is the silent thief that is deliberately built into the system. And no matter how you put it…”Stimulus, Monetizing Debt or Quantitative Easing” it’s still just inflation, and historically it has been the last gasp of every banana republic that ever resorted to
      printing cash to cover its wrecklessness.
      We’re in a Keynesian bubble and it is about to burst.

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