The Real Story of the Day: Ben Bernanke - Slower growth, more inflation

Being the cynic that I am, I think Obama finally caved on the birth certificate issue to cover up this major piece of bad news.

CNBC: In his first regular news conference, Federal Reserve Chairman Ben Bernanke said the central bank was continuing its stimulus policy because it was projecting slower growth in the economy with only a modest uptick in inflation.

The Fed cut its growth estimate for 2011 to between 3.1 percent and 3.3 percent from a January forecast of 3.4 percent to 3.9 percent.

The Fed also raised its estimate of inflation this year to a range of 2.1 percent to 2.8 percent, taking into account a recent surge in oil prices. However, it bumped its core inflation forecasts only marginally to a 1.3 percent to 1.6 percent range.

As for unemployment, it lowered its forecast but said it would stay elevated over its three-year forecast period. For 2011, the Fed said it expects the unemployment rate to land in a 8.4-8.7 percent range, better than a range of 8.8-9.0 percent forecast in January. [MORE]

So basically we can look forward to unemployment staying at these level and finally the Fed admits to what we have long known, inflation is here. Bernanke did not take responsibility for fueling inflation with Quantitative Easing (Q.E. 1 & 2).

Bernanke said the Fed would continue with bond buying (buying our own debt).

The statement marked the conclusion — at least for now — of the massive expansion of the Fed's balance sheet that helped pull the economy out of its deep recession.

"On policy, the statement confirms that (the bond buying) is over but otherwise leaves everything on the table subject to regular review 'in light of incoming information,'" said Stephen Stanley, chief economist at Pierpont Securities.

Still, the central bank said it would continue to reinvest proceeds from maturing securities it holds to keep its economic support in place, ensuring it would remain a big buyer in debt markets.

Search across the net and you will have to do some digging to find any real discussion on this matter, even though Bernanke's first press conference was getting a lot of attention days before. You can thanks the birthers and Trump for moving this story to the back pages. Too bad, because this is the real type of issue that will defeat Obama in 2012.

Below are videos from Bernanke's Q and A.

Via: The Blaze
Via: CNBC

Funny Money: Feds to spend another trillion to buy our own debt

The Wall Street Journal: The Federal Reserve announced a bold plan today to try to invigorate the economy by buying $600 billion more in Treasury bonds.

The Fed said it would buy the long-term government bonds by the middle of 2011 to further drive down interest rates on mortgages and other debt. This is in addition to an expected $250 billion to $300 billion in Fed purchases over the same period from reinvesting proceeds from its mortgage portfolio. ...

One of the great challenges facing Republicans over the next two years will be to get America off the sinking ship QE2.  I am not talking about the Queen Elizabeth 2, I am talking about the foolish and dangerous fiscal policy called Quantitative Easing.  Quantitative Easing is just banker speak for devaluing the dollar by running the printing press. Printing money to pay off the debt is basically what Third World nations do before they go bankrupt.

The problem here is that each and every time the Fed prints up money they don’t really have, the actual money you and I really have decreases in value. The scheme the Feds are trying to pull off is to lower long term interest rates and get people to start borrowing money again.  To me this shows a basic lack of understanding as to why people are not borrowing.

I am a small business owner and I can tell you I won’t borrow a dime now because I have no idea what tomorrow is going to bring.  I have no idea how my business is going to fair over the next few months in this economy and I have no idea what my tax rate is going to be next year.  Without any certainty in these matters why on earth would I want a loan note hanging over my head?  If the Feds want people to start borrowing again, they have to create a climate where people feel safe doing so.  Currently it is just way too risky to extend yourself.

Via: Memeorandum

Via: The Wall Street Journal

Federal Reserve gone wild

The Federal Reserve is long over due for an audit and this radio interview with Congressman Alan Grayson (D-FL) proves it. Hat tip to Glenn Beck's twitter page. By the way, I think Alan Grayson is the kind of Democrat Sarah Palin had in mind when she said she would support Democrats.