Thursday, January 13, 2011

The Fed Going Bankrupt? No Way

Yes way!

--William Ford, former president,
Federal Reserve Bank of Atlanta

nd this from Richard Fisher, president,
Federal Reserve Bank of Dallas,
the very next day:

"The entire FOMC knows the history and the ruinous fate that is meted out to countries whose central banks take to regularly monetizing government debt. Barring some unexpected shock to the economy or financial system, I think we have reached our limit. I would be wary of further expanding our balance sheet."

Complete speech here.

Need more?
Charles Prosser, president
Federal Reserve Bank of Philadelphia:

"Monetary policy is not going to be able to speed up the adjustments in labor markets or prevent asset bubbles, and attempts to do so may create more instability, not less. Nor should monetary policy be asked to perform credit allocation in support of particular sectors or firms. Expecting too much of monetary policy will undermine its ability to achieve the one thing that it is well-designed to do: ensuring long-term price stability."

Complete speech here.

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