In Fed Shift, Bernanke Says He Wants More Inflation

Ever since the 1970s, one of the key jobs of the US Federal Reserve has been to fight inflation. Now, it seems the Fed is embarking on a path to resurrect its old foe.
On Friday morning, at a conference on Fed policy in Boston, Fed chairman Ben Bernanke made the case that the US central bank needs to do more to boost the economy. For Fed watchers this was expected. Unemployment remains high and the US recovery seems to be slowing. Bernanke's plan is to use central bank funds to buy up long-term Treasuries and other bonds in an effort to drive interest rates down, and lower borrowing costs for consumers and companies. And Bernanke is indicating, as expected, that the Fed will most likely act on that plan when it meets again in early November.

curiouscapitalist.blogs.time.com...

Okay, this is totally stupid. Prices are already high. People more and more cannot even afford a place to live. Yet, these people want this to cost even more!

Things are going to get much much worse.

reply to post by Jessicamsa


Deflation will make much of the American debt unsustainable. People won't pay their credit cards, their mortgages, or any debt item because they won't be able to with a deflationary money destruction environment. In that kind of situation, the "borrower is a slave to the lender" gets thrown out the window because such a situation is impossible. The lender institutions and all that surround them will fall. The American people will be debt free by default and being debt free will be freedom from and the fall of Wall Street banking.

Inflation is what keeps the debt system going, this is why the dollar has been steadily losing value since the inception of the Federal Reserve. The banks need to keep the system propped up by increasing inflation or else their power is gone.

reply to post by wutone


Okay. So this is a total bad thing as far as the common folk are concerned. But it's great for the elite.

Which is the greater threat to economic society?

Inflation with its effects felt in price rises in consumer goods and commodities? Or Interest rate increases with its rises in the value of debt?

You can't lower one end of the macroeconomic see-saw without raising the other