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Fed Officials Arguing Over Inflationary Economic Policy

February 21, 2013 by  

Fed Officials Arguing Over Inflationary Economic Policy

For years, fiscal policy conservatives have been shouting that the Federal Reserve will have to deal with the consequences of its massive stimulus efforts. It seems the time is near, as Federal Reserve minutes from January show central bank officials in disagreement over how and when the Fed will end its stimulus efforts.

According to the minutes of the Federal Open Market Committee’s Jan. 29-30 meeting, officials “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved.”

Fed Chairman Ben Bernanke has advocated a central bank policy that would continue purchases of Treasury and agency mortgage-backed securities until the outlook for the labor market improves “substantially.”

But members of the committee are reportedly divided down the middle about adhering to Bernanke’s policy, with half favoring ending bond purchases by mid-2013.

At least one Fed official, Esther L. George, stated concern that the continued high level of monetary accommodation increases the risks of future economic and financial imbalances as well as an increase in long-term inflation. Other members said that when the Fed readies itself to offload some of the bond purchases in its portfolio the central bank could experience “possible complications” and “significant capital losses.”

For now, the central bank is slated to continue on its current path of near-zero interest rates and $85 billion of monthly bond purchases. Next week, Bernanke is scheduled to testify before the House Financial Services Committee to explain the Fed’s ongoing policy. That committee is chaired by Representative Jeb Hensarling (R-Texas), who has previously criticized the Fed for “a multitude of fiscal policy sins” that he believes will lead to the onset of rampant inflation.

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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  • Warrior

    In the “progressive” world, CPI is now calculated by combining the cost of Korean, Japanese and Chinese 50″ LCD TV’s, dividing by 3 and then comparing to last years model’s average cost. I learned that from chris hollingsworth from Maryland. That guy is a genius. Thanks Maryland for your contribution.

  • ibcamn

    This is all like Russian roullette,print from nothing is nothing,right!?plus didn’t this guy fudge some numbers at his last job?!the mob would hire crooked bankers to launder money,Obama hired a man who’s not only crooked,but can’t add!and has Obama’s values,but this is all like Gores fuzzy math and attitude to others!and George Sores belief in the world(order)and just add it all together and you have………..let me see,carry the knot,…and knot knot,and then you add knot knot,and carry the knot,bring down the knot and you got ??what ever the hell is going on,thank you Jethro Bodine for the math lesson!

    this is like the collage math,if a train goin 60mph left Washington at 2pm and a train leaving Obama land at 3pm going 45mph how long would it take them to crash!??!

    hey warrior,if you are traveling down a two way stream in a one way canoe and found out the diffirence between an orange while carrying your lunch to work instead of walking,how many waffles does it take to shingle a doghouse?!

    19 because there’s no bones in ice cream!…..8 fosters big can!!…thanks Shark Bay Aus…Dundee’s…(again,don’t do this)

    • Warrior

      LMAO – is the 60 mph train “high speed rail”? If it is the answer is $16,640,933,357,892.00 bananas. Stop throwing me “softballs”!

  • http://yahoo Don

    the house passed ron paul’s audit the fed reid. the democratic bought off and paid for senate leader had to get bernankes permission to push it. common rest of congress if you aren’t bought like reid, please push it for the good of the country. reid barely won in his last election. he will lose the next. we need to get rid of his type in congress.

  • Bob

    Thing is, how are we going to protect ourself from inevitable inflation??
    Do we just get the hell out of individual funds and go all in on Tips, do we just cash in our 401k’s pay the penalty (if under 59 1/2) and buy tangible gold and silver and but it underground? All valid questions before TSHTF. So really how do you save yourself from inflation?? Looking for answers.

    • meteorlady

      I’d buy gold and silver stocks, then invest in gold and silver but some stocks like Walmart and Coca Cola would be nice. Also accumulate goods like liquor and items you can barter with. I’m even put away food supplies right now today before they prices go up further and further which they will.


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