Fed Forecasts Economic Gloom
Federal Reserve Chairman Ben Bernanke expects America's economic struggles to continue well into next year and has asked Congress to expand his regulatory powers. Lawmakers are unlikely to fulfill his request any time soon. Bernanke also suggested that the Fed could continue to bail out investment banks.
Federal Reserve Chairman Ben Bernanke expects America’s economic struggles to continue well into next year and has asked Congress to expand his regulatory powers. Lawmakers are unlikely to fulfill his request any time soon. Bernanke also suggested that the Fed could continue to bail out investment banks.
WAIT BEFORE YOU GO...New York Times:
Federal policy makers have concluded that the turmoil plaguing the housing and financial markets is likely to spill deep into 2009, becoming one of the most significant domestic problems to confront the next president when he steps into the White House in January.
Ben S. Bernanke, the chairman of the Federal Reserve, publicly indicated on Tuesday that he believes the problems will persist into next year when he outlined a series of steps the Fed is considering in the coming months.
One such step would extend low-interest lending programs to Wall Street’s largest investment banks into next year. The programs, one of which was set to expire in September, can continue only if the Fed issues a finding that there are “unusual and exigent circumstances” that justify them.
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Market forces are colliding as another U.S. financial crisis brews. Meanwhile, sit tight on the roller coaster.
The September/October issue of Foreign Affairs features an article titled “Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.” It’s the sort of thing normally heard only from money reformers and Social Credit enthusiasts far from the mainstream. What’s going on?
"Hundreds of pages of transcripts, based on recordings made at the time, reveal the ignorance of Fed officials about economic conditions during the climactic months of the financial crisis," The New York Times reports.
Congress has the power to amend the Fed -- just as it did in 1934, 1958 and 2010. For the central bank to satisfy its mandate to promote full employment and become an institution that serves all the people -- not just the 1% -- the Fed needs fundamental reform.
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