Wages are stalled, job numbers are anemic, prices are up and social security payments are frozen. The Fed’s policymaking committee “is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate.” Apparently, action is needed, even though Bernanke is speaking in yesterday’s terms.
According to Bernanke, current inflation numbers are well below the Fed’s objective of 2%. He is worried about deflation caused by printing dollars. Now the Fed will print more dollars and buy securities on the back end in a sort of mock economic transaction. Inflation and Fed profits are the main concern. Inflation allows central bankers to take an additional cut of economic life blood for their services. In the past, Bernanke has tried upselling to Wall Street. Today, many news articles are claiming that the Fed plans to tame inflation. He expects to create inflation, but does the Fed have the control it needs to regulate that inflation? Bernanke thinks so. Bernanke claims to believe that the Fed’s intervention will stimulate the economy, reduce unemployment and prevent deflation. Clearly, the Fed thinks they are large and in charge. This comment and others were made to show intent about “avoiding a double-dip recession.”
Chairman Ben Bernanke said this morning that the Federal Reserve is prepared to take new action to boost the economy. Inflation has been too low of late and unemployment is poised to come down too slowly. They intend to create inflation. Are you ready for the fallout?
Meanwhile in the United Kingdom, Justice Minister Ken Clarke warned that world is “in grave danger of financial collapse.” He warned that western nations are “not out of the woods yet”…”We have rescued ourselves for the moment from being bracketed with the weaker brethren with doubts about our credit rating and the costs of our borrowing, but if we fail to deliver the kind of program we have set out we will be back there all too soon if we are not too careful.” Clarke’s comments come only six days before the coalition government’s massive spending cuts are announced. The U.K. government argues that the cuts are necessary to restore the economy to health. Opponents claim they will push the U.K. into a double-dip recession.