In recent news, mainstream Republicans and establishment figures are coming out of the woodwork in opposition to QE2. Equipped with a new-found understanding of economics, they are suddenly worried about inflation.The President of the World Bank, Robert Zoellick, has called for the G20 to look into using gold to check inflation.
Sarah Palin, not usually a bastion of Austrian economic thought, is now worried about inflation and demanding that Bernanke "cease and desist." She expounds:
"We shouldn't be playing around with inflation. We don't want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings."
She was even featured on Judge Napolitono's Freedom Watch regarding the matter.
Indiana Rep. Mike Pence is also new opponent of Bernanke, planning to introduce legislation that eliminates the Fed's mandate of maintaining "full employment and stable prices" and instead just focusing on inflation, saying “the Fed’s dual mandate has failed.”
In what will likely be a historical editorial, several fiscal conservatives & economists published an open letter in the Wall Street Journal calling out Bernanke for his reckless behavior, expressing concerns that "the planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment."
What has wrought this surge of wisdom?
Could it be that the new 600 Billion Dollar "Quantitative Easing" that is flooding the already saturated currency markets really has finally caused some concern, even amongst the establishment? I'm not certain that anyone can know for sure, but this is a very interesting turn of events.
All this public outcry about the actions of a Bush era Fed Chairman, whom Obama just reappointed this year, and Obama still stands behind him stating, "the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole."
Ah, but the global community now seems to disagree over what is "good for the world as a whole," with just one example being German finance minister, Wolfgang Schaeuble, balking at the proposal. He stated, "it's not right when the Americans accuse China of manipulating exchange rates and then push the dollar exchange rate lower by opening up the flood gates by turning on the printing presses."
Indiana Rep. Mike Pence is also new opponent of Bernanke, planning to introduce legislation that eliminates the Fed's mandate of maintaining "full employment and stable prices" and instead just focusing on inflation, saying “the Fed’s dual mandate has failed.”
In what will likely be a historical editorial, several fiscal conservatives & economists published an open letter in the Wall Street Journal calling out Bernanke for his reckless behavior, expressing concerns that "the planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment."
What has wrought this surge of wisdom?
Could it be that the new 600 Billion Dollar "Quantitative Easing" that is flooding the already saturated currency markets really has finally caused some concern, even amongst the establishment? I'm not certain that anyone can know for sure, but this is a very interesting turn of events.
All this public outcry about the actions of a Bush era Fed Chairman, whom Obama just reappointed this year, and Obama still stands behind him stating, "the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole."
Ah, but the global community now seems to disagree over what is "good for the world as a whole," with just one example being German finance minister, Wolfgang Schaeuble, balking at the proposal. He stated, "it's not right when the Americans accuse China of manipulating exchange rates and then push the dollar exchange rate lower by opening up the flood gates by turning on the printing presses."
On top of all this, Rep. Ron Paul is about to be appointed to chair the committee that oversees the Fed. The man with a taste for central bank blood is going to be overseeing its operations, and with his son Rand Paul in the Senate anti-Fed legislation will have a stronger foothold.
All of this may very well spell political disaster for Obama, having attached his Presidency to a monetary policy doomed to failure.
Eric Sharp,
Regular Columnist, THL
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