From remarks contained in a preview of Gov Palin’s reference to Quantitative Easing obtained by NRO the lady seems a tad underwhelmed by the Federal Reserve’s proposal to buy billions of dollars worth of US government securities with money it has created ex nihilo (as a Roman might say) or, as Palin expresses it, “out of thin air”
The Fed hopes doing this may buy us a little temporary economic growth by supplying banks with extra cash which they could then lend out to businesses. But it’s far from certain this will even work. After all, the problem isn’t that banks don’t have enough cash on hand – it’s that they don’t want to lend it out, because they don’t trust the current economic climate.
And if it doesn’t work, what do we do then? Print even more money? What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?
Naturally several of the comments were disparaging – the idea that some housewife from Wasilla (interesting how this has been airbrushed out of the narrative) should criticise Ben Bernanke over quantitative easing aroused peals of merriment in some quarters.
I doubt seriously Palin even knows what the Fed is. Someone had to have written this speech for her.
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Okay, so Sarah Palin is “challenging” Bernanke’s decisions. I’m sure that’s really got him rethinking everything: “Well, if Sarah Palin says I’m taking the wrong tact here, by golly I’d better reconsider!”
Oh yes – let’s have a great laugh at Sarah Palin’s lack of enthusiasm for Bernanke’s policy. And while were at it let’s poke fun at Federal board member Kevin Warsh, and World Bank president Robert Zoellick…..and the chief of Brazil’s Central Bank…
As for the Germans – this guy is a real barrel of laughs
“A policy error,” said Ulrich Leuchtmann from Commerzbank. The wording of the Fed statement is “potentially dangerous” because it leaves the door open to a further flood of Treasury purchases if unemployment stays high. “It is a bottomless pit,” he said.
Palin, Zoellick, Warsh, the Germans, Brits, Chinese, Brazilians…..what the hell do they know about money……
