President Obama has nominated Federal Reserve chairman Ben Bernanke for the second term, but the National Inflation Association (NIA) is not happy with that decision.
In announcing the nomination two weeks ago, Obama praised Bernanke’s performance during the most acute phase of the financial crisis saying he acted with "calm and wisdom."
"[His] bold action and out-of-the-box thinking has helped put the brakes on our economic freefall," Obama said.
However, NIA believes Bernanke’s recent actions – in particular taking the worthless mortgage -backed securities, auto loans and student loans onto the Fed’s balance sheet – are giving the economy what they call "an artificial high" and will lead to an even bigger crash later.
"It’s unfortunate how forgetful Washington is and how the media fails to talk about how Bernanke has simply taken Alan Greenspan’s mistakes and made them bigger," says NIA, referring to the fact that in 2001 the former Fed chairman lowered interest rates to 1 percent, which is widely credited with creating the real estate bubble at the heart of the current crisis.
NIA has long sought to warn 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 has estimated the deficit to reach $9 trillion over the next 10 years.