BERNANKE STANDS READY TO DEVALUE YOUR DOLLARS, what part of this do you not understand?
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke heads to Congress Wednesday with a message of reassurance: The Fed stands ready to take new steps to bolster the recovery if the economy worsens.
The Fed chief kicks off back-to-back appearances on Capitol Hill at a delicate time for the economy. The recovery, which had been flashing signs of strengthening earlier this year, is losing momentum. And fears are growing that it could stall.
Consumer have cut spending. Businesses, uncertain about the strength of their own sales or the economic recovery, are sitting on cash, reluctant to beef up hiring and expand operations. A stalled housing market, near double-digit unemployment and an edgy Wall Street shaken by Europe's debt crisis are other factors playing into the economic slowdown.
Bernanke, who is scheduled to deliver his twice-a-year economic report to the Senate Banking Committee on Wednesday afternoon, will probably again downplay the odds that the economy will slide back into a "double dip" recession. But at the same time, he'll strike a more cautious tone, pointing out that the fragile economy is still vulnerable to shocks.
To strengthen the economy, the Fed is likely to hold a key bank lending rate at a record low near zero well into 2011, or possibly into 2012, economists predict. That would mean rates on certain credit cards, home equity loans, some adjustable-rate mortgages and other consumer loans would stay at their lowest point in decades.
Ultra-low lending rates, however, haven't done much lately to rev up the economy. Consumers and businesses are cautious and aren't showing an appetite to spend as lavishly as they usually do in the early stages of economic recoveries.
Even though the prospects of deflation -- a widespread and prolonged drop in prices for goods, the value of stocks and homes and in wages -- is remote, some Fed officials are worried about it. Keeping rates low would help prevent deflationary forces from taking hold.
Against such a backdrop, Fed officials at their June meeting cut their forecasts for growth this year. They also saw the need to explore new options for energizing the rebound. That's a turnaround from earlier this year when they were moving to wind down crisis-era supports.
If the recovery were to deteriorate, the Fed could revive programs to buy mortgage securities or government debt. It could lower the interest rate paid to banks on money left at the Fed or cut the rate banks pay for emergency Fed loans. The Fed also could create a new program to spark more lending to businesses and consumers in a bid to lure them to ratchet up spending and grow the economy.
The economic hurdles to taking such steps would be high, analysts say. There's also unease within the Fed about taking additional stimulative steps because of fear they could spur inflation or speculative excesses by investors later on.
Bernanke will be under more pressure than usual because it's an election year. Upset by high unemployment, rising foreclosures and lackluster wage gains, voters may seek to punish incumbent Democrats and Republicans in Congress if the economy doesn't get better. The unemployment rate, now at 9.5 percent, is expected to stay high -- in the 9 percent range -- through the end of this year, under the Fed's forecast.
Despite the wobbly recovery, there's little appetite in Congress to enact a major new stimulus package. Senate Republicans in particular have balked at spending more when the government is already saddled with record high budget deficits.
Bernanke appears before the House Financial Services Committee on Thursday.
When Bernanke delivered his economic report to Congress in February, he struck a confident note that the rebound would endure. But he warned it would not be robust enough to quickly lower unemployment. At the same time, he was laying the groundwork for the Fed to start boosting rates once the recovery was firmly entrenched.
Now, given rising threats to the rebound, prospects of a rate increase this year have disappeared, and the Fed is more focused on keeping the recovery alive
ANYTHING to prop up HIS FAKE RECOVERY ! SCREW THE SAVERS and responsible ,lets help the wall street gamblers get easier access to dollars !
- oohhbotherLv 71 decade agoFavorite Answer
The predictions of massive inflation about to start immediately have been coming for a couple of years now. I'm sure someday inflation will happen.
I side with the recovery no matter how long it takes.
Answers is not a blog site.
- 1 decade ago
Baernanke should be in jail or executed for robbing blind the american savers forcing a monetary policy of zero rates.
Next day all the banks started paying a sh*t on saving accounts and in two years the prices of every commodity have gone up by 50% or so, and the national debt doubled, and the rate of US treasury auctions is now 9 trillions per year, that's 4 times tax revenues.
If you run a business and didn't switch from dollars to gold at that time you got hit by a 50% devaluation of your purchasing power for materials to run the production cycle. Bernanke is a theft and should be executed.
Now if we ever get a recovery who is going to get the benefit? the people who saved and lent the money for the recovery? NO, they are getting the finger and their money trashed.
Now all the bacon goes to the FED who is the only lender
The idiot that wrote below saying people get the sh*t out to china because our currency is stronger knows sh*t about running a business that produce real stuff. He must be a banker or an insurance guy. Jack ***, if you produce something you need a strong currency to buy back the materials used in the production cycle, the stronger the currency the better, idiot. They all chant the same sort of crap they see on TV with no f***ng clue
- Anonymous1 decade ago
The country is screwed, people are too economically brainwashed. Paper money doesn't even work, it never has. This isn't a recovery, it's a prop-up until the dollar crashes. The dollar has devalued by over 95% since the Fed was implemented, *fact*.
- Franco PotancoLv 51 decade ago
If you're going to post a story, you should at least find one that supports your assertion... this one says the chances of deflation are remote.. I'm no economist, so don't really know if that would happen, but I'll take their word for it, based on this story.
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- qncyguy21Lv 61 decade ago
Hey genius, you do realize the whole reason jobs are being ousourced is because their currency has a lower value than our currency right?
If you are saving money in a bank you are being screwed anyway.
- Atheist ChuckLv 61 decade ago
- Anonymous1 decade ago
Down with privatized banks ! Down with big brother !
- Blue Dog DemLv 41 decade ago
basically he is saying whatever obama passes through congress as law he will follow because he has too. Ben is from my state and i stand by him because in the end he is an AGENCY of the preseident and cannot go against what his boss says to him
- Anonymous1 decade ago
Cornspiracy nut alert.