Reuters: Bernanke said Tuesday he will continue the endless QE3. The Fed is currently buying $85 billion in bonds each month.
Bernanke warned against the cuts to the increase in spending which will take place on Friday as a result of sequestration.
The Secretary of the Navy sounded the alarm about the effect sequester will have on defense during an interview on Happening Now today.
The Secretary, a supporter of President Obama, called sequester a bad idea, as if it were not Obama’s idea. He also said that Obama has a reasoned plan.
Obama’s only plan is to raise taxes. President Obama calls it balanced which would make one think it includes cuts with increased taxes. Unfortunately, Obama’s plan is only to tax.
Sequestration is a mere 2% cut in a three trillion dollar budget but we are to believe that the government can’t find the money. Sequester, which, as I said, was President Obama’s idea, is not a cut, it’s a cut to the increase. The spending will still increase.
The problem is the way the cuts are being made. Sequester is across the board cuts, half of which come from defense.
President Obama has complete control over how the cuts are made. The democratically-controlled Senate has turned this power over to the President.
President Obama will not negotiate with the Congress and is out campaigning instead.
Bernanke disingenuously tied a worsening unemployment rate and bad economy to sequester.
Bernanke said that he is aware of the fact that his bond buying (QE3) could end up causing inflation and/or asset bubbles but he’s not worried. He said the benefits outweigh the risks, whatever that means.
A number of officials at the Fed are concerned and believe the purchases should be curtailed but Bernanke doesn’t agree and will keep stimulating the economy with funny money.
Amazingly and unbelievably, he said, ”My inflation record is the best of any Federal Reserve chairman in the post-war period. We are not engaged in a currency war.”
Good grief! We’re not engaged in a currency war?
When Elizabeth Warren asked him about the subsidies to banks that are too big to fail which are taking place under QE3, he said that we wouldn’t have to bail out banks that are too big to fail thanks to Dodd-Frank. Huh? QE3 is a bailout.