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NIA Criticizes The Fed For Leaving Interest Rates Unchanged

October 12, 2009 by  

NIA criticizes the Fed for leaving interest rates unchanged Late last month, the Federal Reserve Open Market Committee said the economy was improving, but kept the benchmark interest rate target at all-time lows, a move that has drawn criticism from the National Inflation Association (NIA).

Some interpreted the decision to leave the rates effectively at 0 percent as indicative of the Fed’s determination to "nurture a budding economic recovery by providing liquidity to the financial sector," according to MoneyMorning.com.

However, the NIA has expressed doubts about the wisdom of this type of approach, drawing on past experiences where low interest rates fed boom-and-bust cycles in the U.S. economy.

"If the economy was truly rebounding, wouldn’t you think now is the time for Bernanke to raise interest rates to 1 percent or possibly even 2 percent?" it asks.

It has also called on Americans to "stand up now and express our outrage about the Federal Reserve’s destruction of our nation."

The organization says that Fed chairman Ben Bernanke caved in to political pressure in keeping the rates at 0 percent, and it believes the resulting flood of money on the market will lead to inflation and the collapse the U.S. financial system.

NIA has also warned Americans about impending hyperinflation due to the government’s level of spending which has led to a massive federal budget deficit. The White House Office of Management and Budget estimates the deficit will reach $9 trillion over the next 10 years.
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  • http://www.eclecticward.com/politics/ Ward Tipton

    Double digit inflation and interest rates … coming soon to a city near you.

    All they are doing is attempting to stem off the inevitable … likely until after the 2010 elections at least. As long as they can continue their reign, they will be free to further the destruction of our economy and use that as a means to an end.

  • Norm

    Forcing interest rates to stay low, as opposed to free market control, only tilts the playing field in the direction of borrowers at the expense of lenders. It is one of causes of the mortgage failure crisis that we are currently in. I agree that rates will rise at a very fast rate once employment begins to rise and inflation increases.
    I don’t believe (and neither do 99% of ecconomists) that this administration is the cause of the current recession. The lack of controls on the banking sector and the stupidity and greed of on it’s managment is the main culprit.

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