reply to post by Kaytagg
Did you read it?
The seven steps that the Federal Reserve needs to take are:
1) Increase the money supply (M1 and M2).
"The U.S. government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost."
"Under a paper-money system, a determined government can always generate higher spending and, hence, positive inflation."
2) Ensure liquidity makes its way into the financial system through a variety of measures.
"The U.S. government is not going to print money and distribute it willy-nilly ..."although there are policies that approximate this behaviour."
3) Lower interest rates - all the way down to 0 per cent.
Bernanke observed that people have traditionally thought that, when the funds rate hits zero, the Federal Reserve will have run out of ammunition.
However, by imposing yields paid by long-term Treasury Bonds,
"a central bank should always be able to generate inflation, even when the short-term nominal interest rate is zero ...[this] more direct method,
which I personally prefer, would be for the Fed to announce ceilings for yields on all longer-maturity Treasury debt."
He noted that Fed had successfully engaged in "bond-price pegging" following the Second World War.
4) Control the yield on corporate bonds and other privately issued securities. Although the Federal Reserve can't legally buy these securities
(thereby determining the yields); it can, however, simulate the necessary authority by lending dollars to banks at a fixed term of 0 per cent, taking
back from the banks corporate bonds as collateral.
5) Depreciate the U.S. dollar. Referring to U.S Monetary Policy in the 1930's under Franklin Roosevelt, he states that:
"This devaluation and the rapid increase in money supply ... ended the U.S. deflation remarkably quickly."
6) Execute a de facto depreciation by buying foreign currencies on a massive scale.
"The Fed has the authority to buy foreign government debt ... [t]his class of assets offers huge scope for Fed operations because the quantity of
foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt."
7) Buy industries throughout the U.S. economy with "newly created money" In essence, the Federal Reserve acquires equity stakes in banks and
financial institutions. In this "private-asset option," the Treasury could issue trillions in debt and the Fed would acquire it - still using newly
He wants to cause inflation.
Therefore, what you buy costs you more money.
If you can't afford it you have to go to the banks to get credit or a loan.
Then they make more money money.
If our goods cost more money, no other countries can afford them and we can not compete and all manufacturing goes to China.
He wants to devalue the dollar. you don't mind if your hourly wage stays the same and you dollar is worth less?
he wants to control yield on corporate bonds and privately held securities. So he thinks he needs to be involved in the yields of stocks you own?
In addition he stated he wanted to buy industry with newly created money.
So they print money that the government owes them money on and buy stocks in companies with it.
Maybe you should read the speech and then ask what is wrong with it.