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Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.

Ben Bernanke

Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.
BEN BERNANKE

Choices Fields Past
Although low inflation is generally good, inflation that is too low can pose risks to the economy – especially when the economy is struggling.
BEN BERNANKE

Economy Risk Struggle
The more important reason is that the research itself provides an important long-run perspective on the issues that we face on a day-to-day basis.
BEN BERNANKE

Issues Perspective Running
I don’t think that Chinese ownership of U.S. assets is so large as to put our country at risk economically.
BEN BERNANKE

Country Risk Thinking
The crisis and recession have led to very low interest rates, it is true, but these events have also destroyed jobs, hamstrung economic growth and led to sharp declines in the values of many homes and businesses.
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Growth Home Jobs
The Federal Reserve will not monetize the debt.
BEN BERNANKE

Debt Federal Reserve Reserves
Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.
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Depression Financial Great Result
[Virtual Currencies] may hold long-term promise, particularly if the innovations Promote a faster, more secure and more efficient payment system.
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Innovation Long Promise
Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.
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Banking Banks Commercial Investment
It’s true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles.
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Circles Political Pressure
The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand.. a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.
BEN BERNANKE

Cutting Ongoing Order
Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.
BEN BERNANKE

Committee Country Moving
The amount of currency in circulation is not changing. The money supply is not changing in any significant way.
BEN BERNANKE

Currency Significant Way
The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
BEN BERNANKE

Financial Impact Problem
The best approach here, if at all possible, is to use supervisory and regulatory methods to restrain undue risk-taking and to make sure the system is resilient in case an asset-price bubble bursts in the future.
BEN BERNANKE

Investing Risk Use
The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
BEN BERNANKE

Government Technology Wish

Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.

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Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.

Related Topics

Popular Authors

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