Anna Schwartz rips into the Federal Reserve & Treasury bank bailout

October 28, 2008 by · Leave a Comment
Filed under: Opinion 

Well with Anna Schwartz’s credentials, I hope people will heed her warning.  As I felt all along, this bailout operation is going to be inflationary.  In the end, this only helps the wealthy who can weather this financial hurricane and hurts mainstreet through the hidden taxation of inflation.  Funny how the government touted this plan as a well to help mainstreet.  

I wonder how getting people to borrow and lend is going to fix our problems?  It seems to me that debt and lack of income is what helped get us to this point?  Even today we had a 900 point rally in the DOW Jones on the rumors of a major interest rate cut from the Fed.  Now they have to deliver or we will see a 1,000 point drop because the market has priced in this cut.   Who is dictating policy at this point?

Barron’s Piece:

 Nobel Laureate Milton Friedman of the seminal A Monetary History of the United States, has worked with the National Bureau of Economic Research since 1941, and remains an adjunct professor emeritus at the Graduate Center of the City University of New York. 

About to turn 93, she has spent most of her professional life studying how the changes in money supply interact with inflation — both within the United States and abroad.

 

When it comes to the unprecedented lending by the Federal Reserve Bank under Chairman Ben Bernanke and new and untested programs from the Treasury and its head, Henry Paulson, she doesn’t like what she sees.

Her prescription: Stop managing by press release. The federal government needs to turn off the liquidity spigot and quarantine bad assets. Ad hoc program announcements have only undermined faith in the U.S. financial system, in her view, and, if continued, could raise fears that ultimately threaten the U.S. financial system. Here are more of her provocative thoughts on the current crisis.

Click Here to Read the Full Interview

 

 

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