On Bernanke's Columbus-Like Voyage To The End Of The Monetary Policy World
Whether the optics of a jobs-related target for the Fed's QEternity are election-based public relations, from-the-heart sentiment of an ivory tower academic neck-deep in the reality of his failed ethos, or well-intentioned more-of-the-same Krugmanite 'we need a bigger boat' print til-we-stink policy; it is relatively clear that the Fed has changed course. The longstanding problem at the Fed has been that while each policymaker more or less agreed that guiding policy by a rule made sense, they could not collectively agree on the rule. Morgan Stanley's Vince Reinhart notes perfectly that at its September meeting, the Fed effectively evaded the issue by setting QE off in a general direction, much in the same way Columbus pointed his three ships West and expected eventually to land in India. The history books admire the audacity of a man with a vision. Columbus sailed in the direction toward the known world’s end. Of course, he also sailed further than expected and landed on a completely different continent than planned. If the Fed has not acted consistently over the past few meetings, how will market participants infer future action?
Further monetary stimulus now is unlikely to result in a discernible improvement in growth, but if it does, it’s also likely to cause an unwanted increase in inflation.... Channeling the flow of credit to particular economic sectors is an inappropriate role for the Federal Reserve. As stated in the Joint Statement of the Department of Treasury and the Federal Reserve on March 23, 2009, 'Government decisions to influence the allocation of credit are the province of the fiscal authorities.'"
From The Last Sane Person At The Fed: "More Easing Will Not Lead To Growth, Would Lead To Inflation"
MORGAN STANLEY: Investors Are Addicted To Monetary 'Heroin' And Bernanke's Got The Hook Up
Morgan Stanley's Adam Parker has been sticking to his guns by reiterating his call for the S&P 500 to end the year at 1,167.
But he also admits the Fed has scuttled his bearish call so far, and could do so again in the future.
In a note today, he takes out his feelings on Fed chairman Ben Bernanke's decision to initiate unlimited asset-backed securities purchases:
We don’t do heroin. We are sure the period of being high on heroin is “enjoyable.” Even one light beer is a mood enhancer for us. However, we try to see through to the other side of it and make a judgment that injecting heroin into our arms is not a good idea.
How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us
It is utter insanity.
That is why we desperately need to get the American people educated about the Federal Reserve system. It is at the very heart of our economic problems and yet neither major political party is willing to blame the Fed for the problems that it is causing.
A bunch of unelected bankers that are not accountable to the American people are running our economy into the ground and the American people do not even realize what is happening.
Please share this article with as many people as you can. Hopefully we can get the American people to understand that more money printing is definitely not the solution to our problems.