Fed Announces Open-Ended QE3

By: Thursday September 13, 2012 10:15 am

The Federal Reserve made a major and dramatic change to their monetary policy today, moving forward with a third round of quantitative easing that is actually more modest than the first two. However, the much more crucial component to the policy action was the open-ended nature of the commitment, including a promise to keep interest [...]

Paper Criticizes Federal Reserve Approach, Suggests Radical Overhaul of Monetary Policy in the Crisis

By: Sunday September 2, 2012 11:16 am

The upshot of Ben Bernanke’s speech at the economic symposium at Jackson Hole, Wyoming, at least to most interested observers, is that the Federal Reserve will enact a new round of quantitative easing at their next policy meeting the week of September 10. This may be dependent on the jobs numbers that come out this [...]

Industry Touts GMOs as Solution to Drought Conditions for Agriculture

By: Wednesday August 15, 2012 8:15 am

The Consumer Price Index remained unchanged in July, a sign that we’re heading into a disinflationary period. Year-over-year inflation is still missing the 2.0% target, topping out at 1.4%. This is another sign of central bank failure. But decreases in energy were offset by increases in food. This is a residual effect from the drought [...]

Fed Punts Again, Takes No Monetary Policy Action Despite Economic Slowdown

By: Wednesday August 1, 2012 12:27 pm

The Federal Reserve Board of Governors opted again to do nothing after their two-day meeting, remaining pat despite clear evidence of a slowing in the economy and a miss on their two mandates, on maintaining full employment and price stability. This post is going to read like a re-run, because we’ve seen this several times [...]

Follow-Through Still Absent in Euro Crisis

By: Monday July 30, 2012 7:35 am

Spanish and Italian borrowing costs have eased, basically entirely because of some soothing words last week from the head of the European Central Bank, Mario Draghi. He promised to do “whatever it takes” to save the euro, while never explicitly saying what that would entail. Most observers took Draghi to mean that the ECB would [...]

Drought Will Raise Food Prices in What Could Be an Endless Cycle

By: Thursday July 26, 2012 8:55 am

The drought conditions in the Midwest show no sign of letting up, and if you believe the overwhelming amount of evidence on climate change, amounts to something approaching a new normal. So the first thing I’d say about this projection of food prices as a result of the drought is that, in a constantly warming [...]

Federal Reserve Returns to Same Old Failed Solutions to Economic Problems

By: Wednesday July 25, 2012 8:15 am

After watching as they missed both their employment and inflation targets, the Federal Reserve pronounced themselves ready to act, but in the same sluggish, ineffective ways they have over the past couple years: Fed officials could take some actions in combination or one after another. Fed Chairman Ben Bernanke, in testimony to Congress last week, [...]

Drought Conditions Send Commodity Prices Skyrocketing

By: Thursday July 19, 2012 12:17 pm

It’s time to really focus on this major US drought, which has sent commodity prices for corn and soybeans soaring, leading to a likely jump in global food prices. You know it’s bad when the Financial Times gets on the case. The world is facing a new food crisis as the worst US drought in [...]

Bernanke “Prepared” to Do More for Jobs

By: Tuesday July 17, 2012 8:15 am

After three months of ugly job growth, poor retail sales, missed inflation targets and forecasts of minimal economic growth (most analysts reduced their estimate to around 1.1% for the second quarter of 2012), Ben Bernanke finally announced his willingness to “be prepared” for further steps to boost the economy. The Federal Reserve stands ready to [...]

The Fed Doesn’t Want Rapid Economic Growth

By: Thursday July 12, 2012 8:25 am

Minutes from the Federal Open Market Committee’s last meeting showed that several members were interested in additional monetary accommodation, leading to expectations that the Fed will enact quantitative easing at their next assembly in August. But the real shocking part of the minutes come in this discussion of inflation: Looking beyond the temporary effects on [...]

Fed Keeps Missing Targets, Plans to Miss Them for Years

By: Tuesday July 10, 2012 8:55 am

Over the past few days, members of the Federal Reserve Board of Governors have begun to prepare the ground for another round of monetary easing. The arguments for this are simply that unemployment is coming in above target, and inflation below target, so in order to get back on track, the Fed must act. That’s [...]

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