Palin Lashes Out At Bernanke, 'Cease And Desist' Purchase Of Treasuries

[Soul Crusher]

I doubt it would ever come to that, ...but if it did, ...she'd need a gun to do it. lol. 

ha ha ha ha.   

[24KT]

Ooooh... I'm shaking in my Jimmy Choos.
With that scope, ...she could probably see me in Ontario, ...all the way from Wasilla. 

[Soul Crusher]

Ooooh... I'm shaking in my Jimmy Choos.
With that scope, ...she could probably see me in Ontario, ...all the way from Wasilla. 

Nah - that does not look like it has much magnification, more for target aquisition as distances of 100 yards or less. 

[24KT]

Nah - that does not look like it has much magnification, more for target aquisition as distances of 100 yards or less. 

Ya, ...but we're talkin' Palin-vision here. 

[Soul Crusher]

U.S. Wields Less Clout at Summit
Obama Sees Diminished Heft in Seoul Due to Slow Economy, Election Setback.Article \
   By JONATHAN WEISMAN and DAMIAN PALETTA


SEOUL—President Barack Obama headed toward the close of the Group of 20 summit, weakened by an anemic economic recovery and an election drubbing that have left world leaders questioning U.S. authority.
 
President Obama gestured at the start of Thursday's dinner at the National Museum of Korea in Seoul, where G-20 leaders opened their meeting.

In private meetings with Mr. Obama on Thursday, Chinese President Hu Jintao resisted his pressure on currency revaluation. Mr. Obama also failed to secure a free-trade agreement with South Korea by a deadline he set for Thursday, a blow to a president who has pledged to double U.S. exports over the next five years.

The summit of the Group of 20 industrial and developing nations is expected to conclude with a communiqué that papers over differences on fiscal and monetary policy that had been exposed in the run-up to the gathering.

Undersecretary of the Treasury Lael Brainerd said currency policy dominated a meeting between Messrs. Obama and Hu after the U.S. president raised it. Mr. Hu told his U.S. counterpart that China will push forward on revamping the yuan exchange-rate mechanism—a longtime goal of U.S. policy—but that such a move requires "a sound external environment" and can proceed only gradually, according to state television and a government spokesman.

He also told Mr. Obama that China is paying attention to the U.S. Federal Reserve's decision to pump $600 billion into the U.S. economy over the next eight months, which critics say is driving down the value of the dollar. Mr. Hu urged the U.S. to consider the interests of emerging markets, according to Chinese state TV.

"The major reserve-currency issuers, while implementing their monetary policies, should not only take into account their national circumstances but should also bear in mind the possible impacts on the global economy," Zheng Xiaosong, director general of the Ministry of Finance's International Department, reiterated at a pressbriefing.

White House press secretary Robert Gibbs pushed back on the notion that Mr. Obama's authority has diminished. China was not responding to currency pressure when the U.S. president was far more popular, he noted, and critics of US economic policies, like the outgoing president of Brazil, remain helpful on other fronts, from Iran to climate change.

That China was emboldened to lecture the U.S. on its currency, a notable reversal of recent meetings, underscores how it and other countries, including Brazil and Germany, have emerged from the global economic crisis faster and more strongly than the U.S.

Domestic politics may also be at play. An aide to South Korean President Lee Myung-bak blamed the trade pact's failure in part on the U.S. elections, which he said distracted the White House at a key time. White House aides said Mr. Obama could not accept the deal on the table because it could not get through the new Congress.

Mr. Obama found himself in the odd position of having to defend the U.S.'s independent central bank. He was also unable to quell concerns that the U.S. government is deliberately trying to weaken the dollar to boost exports.

Brazi's President Luiz Inácio Lula da Silva said Thursday he would press Mr. Obama to explain the Fed's move. President Lee demurred when asked about it. "I think that kind of question should be asked to me when President Obama is not standing right next to me," Mr. Lee answered.


German Chancellor Angela Merkel and South Korean President Lee Myung-bak "stressed their common concern" over the U.S. Fed's move in their bilateral meeting, a German official said.

The U.S. says the policy is designed only to boost U.S. domestic growth, which is critical to the global economy. It also argues that the dollar's value is correlated to confidence in the U.S. and global recovery, , and some other countries have rushed to the Fed's defense.

"Those who are criticizing the policy of the Federal Reserve, I'm not sure what alternative they're suggesting," Canadian Prime Minister Stephen Harper told reporters in Seoul. "I'm not sure anyone else has provided any compelling argument as to what alternative policy they would pursue, at least in the short term."

View Full Image

Associated Press
 
President Barack Obama met with China's President Hu Jintao on the sidelines of the G-20 summit.

.The meeting of world leaders in Korea kicked off in earnest Thursday evening with a dinner and closed-door meetings focused in part on disputes over currency valuations and trade imbalances. The leaders are expected to reach severalagreements before they adjourn Friday, namely on financial regulation and the role of the International Monetary Fund. But the issues that divide them have led officials to quash expectations of a breakthrough on the top issues of currencies and trade.

"When you see the final communiqué, it will reflect a broad-based consensus about the direction that we need to go," Mr. Obama said. "There may be at any given moment disagreements between countries in terms of particular strategies."

The communiqué won't include a numerical target for trade surpluses or deficits, which the Obama administration had pushed. Nor is it likely to explicitly pressure China to accelerate increasing the value of the yuan, to make Chinese exports more expensive and to empower Chinese consumers. Similarly, it also isn't expected to level direct criticism at the Fed's recent decision to buy bonds. However, the U.S. and China could be criticized indirectly for running big current-account deficits and surpluses, which underlie and reflect exchange rates.

Mr. Obama and German Chancellor Angela Merkel agreed to play down the sniping from officials that dominated the run-up to the summit. Both resolved to pick up the phone before going public with their frustrations.

"They both agreed that it's not ideal in the run-up of a meeting like the G-20 to be reading attacks on specific economic or financial policies in newspapers from Germany or the U.S.," a German official said. "There was an agreement that in the future, perhaps, there could be better consultation."

—Ian Talley
and Patrick McGroarty contributed to this article.
Write to Jonathan Weisman at jonathan.weisman@wsj.com and Damian Paletta at damian.paletta@wsj.com

[Soul Crusher]

Looks like everyone who has a clue agrees with Sarah -not dumbo.

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Huge List Of Investors And Economists Pen Open Letter To Ben Bernanke Slamming QE
The Pragmatic Capitalist | Nov. 15, 2010, 4:34 AM | 1,504 |  12

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The Wall Street Journal ran this open letter to Ben Bernanke from many noted economists, professors and fund managers.  The list is a who’s who of Wall Street and the general message is not dissimilar to what Sarah Palin and Glenn Beck (not exactly the people you want to be next to when making economic prognostications) have been saying – in essence, cease and desist Chairman Bernanke.  While I agree with the general message of the letter (that QE should not be allowed to go forward) it also shows the great level of sheer misunderstanding when it comes to QE.  This one policy has generated more misunderstanding than any policy measure I can remember.

Many of the people on this list have been warning about bond vigilantes while also comparing the USA to Greece for several years now.  Of course, they’ve been terribly wrong and it is entirely due to the fact that they do not understand how the US monetary system works.  Their general fears of inflation and a crashing dollar have been far off the mark for reasons I have discussed in great detail here. What’s unfortunate is that these are many of our best minds.  These are the people driving the economic bus.  It’s no wonder this country is in such an economic hole.

The full letter is attached with some commentary:

“We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued.  We do not believe such a plan is necessary or advisable under current circumstances.  The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.”

The LSAP should be discontinued, but not because it causes inflation or currency debasement.  In fact, it will cause no such thing as QE involves no printing of new money (Chairman Bernanke explicitly stated as much) and has a marginal deflationary bias.  In addition, its impact on interest rate is questionable at best as we’ve seen in Japan, the UK and the USA during QE1.  As I have shown, the early evidence shows that the program is counterproductive.  This program should be ended so as to maintain the credibility of the Federal Reserve and stop all market distortions that are occurring due to the sheer misconception surrounding the policy.

“We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.”  In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.”

Yes, in a balance sheet recession monetary policy becomes quite ineffective.  If the government is going to provide aid to Main Street (not Wall Street!) it should do so via fiscal policy.  A tax cut (such as a payroll tax holiday) is not only politically feasible, but would do a great deal in combating the debt problems that American households currently confront.

“We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.”

Inflation does need to be pushed higher, but it needs to be pushed higher by an increase in aggregate demand.  This will not occur because the Federal Reserve decides to provide the banks with more reserves.  Since QE does not increase the money supply this policy will not cause inflation. Just as it did not cause inflation in QE1 and in Japan earlier in the decade.  IT IS NOT MONEY PRINTING!

The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.

Cliff Asness
AQR Capital

Michael J. Boskin
Stanford University
Former Chairman, President’s Council of Economic Advisors (George H.W. Bush Administration)

Richard X. Bove
Rochdale Securities

Charles W. Calomiris
Columbia University Graduate School of Business

Jim Chanos
Kynikos Associates

John F. Cogan
Stanford University
Former Associate Director, U.S. Office of Management and Budget (Reagan Administration)

Niall Ferguson
Harvard University
Author, The Ascent of Money: A Financial History of the World

Nicole Gelinas
Manhattan Institute & e21
Author, After the Fall: Saving Capitalism from Wall Street—and Washington

James Grant
Grant’s Interest Rate Observer

Kevin A. Hassett
American Enterprise Institute
Former Senior Economist, Board of Governors of the Federal Reserve

Roger Hertog
The Hertog Foundation

Gregory Hess
Claremont McKenna College

Douglas Holtz-Eakin
Former Director, Congressional Budget Office

Seth Klarman
Baupost Group

William Kristol
Editor, The Weekly Standard

David Malpass
GroPac
Former Deputy Assistant Treasury Secretary (Reagan Administration)

Ronald I. McKinnon
Stanford University

Dan Senor
Council on Foreign Relations
Co-Author, Start-Up Nation: The Story of Israel’s Economic Miracle

Amity Shales
Council on Foreign Relations
Author, The Forgotten Man: A New History of the Great Depression

Paul E. Singer
Elliott Associates

John B. Taylor
Stanford University
Former Undersecretary of Treasury for International Affairs (George W. Bush Administration)

Peter J. Wallison
American Enterprise Institute
Former Treasury and White House Counsel (Reagan Administration)

Geoffrey Wood
Cass Business School at City University London

A spokeswoman for the Fed responded:

“As the Chairman has said, the Federal Reserve has Congressionally-mandated objectives to help promote both increased employment and price stability. In light of persistently weak job creation and declining inflation, the Federal Open Market Committee’s recent actions reflect those mandates.  The Federal Reserve will regularly review its program in light of incoming information and is prepared to make adjustments as necessary.  The Federal Reserve is committed to both parts of its dual mandate and will take all measures to keep inflation low and stable as well as promote growth in employment.  In particular, the Fed has made all necessary preparations and is confident that it has the tools to unwind these policies at the appropriate time. The Chairman has also noted that the Federal Reserve does not believe it can solve the economy’s problems on its own.  That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators, and the private sector.”

The Chairman should cease and desist, but not for reasons expressed in the above letter.  The Federal Reserve has placed its credibility at risk while also creating market distortions due to misconceptions surrounding a policy that very few people actually understand.  This is not only unhelpful in solving the actual cause of the current crisis, but creates extreme disequilibrium in markets that only makes matters worse.

Source: WSJ



Read more: http://www.businessinsider.com/huge-list-of-investors-and-economists-pen-open-letter-to-ben-bernanke-slamming-qe-2010-11#ixzz15MSFvMUt