UnNews:Tame inflation gives Fed "ammo"
|(audio)||UnNews Audio (file info)|
|Listen to this story!|
22 November 2010
WASHINGTON, D.C. -- Tame inflation figures are giving the U.S. Federal Reserve "ammo" for its latest plan to print up $600 thousand million of new money, backed primarily by Barack Obama's Teleprompter.
The plan, called "Quantitative Easing, part 2"--or simply "QE2," is the latest attempt to make a bad plan palatable with an acronym, this one suggesting the British monarchy. Former President Bush, however, continues to hold the record for both length and audacity, with his "Patriot Act," a ten-word acronym that suggested that repeal of the Bill of Rights was valiant.
The "core" inflation index has risen only 0.6% in the last year. This is the index that pretends we don't have to eat food or buy gasoline. It is regarded as the most accurate measure, except when the other one is lower. The index is a basket of goods and services. The Federal Reserve notes that computers that run MS-DOS are "downright cheap, these days," as well as analog televisions and 8-track tape players. The price of services is declining as well, include squeegee service on windshields in New York, and whatever it is that you do. Capital goods are also declining in price, including homes and investments.
"QE1" was the Fed's plan to cover federal "stimulus" spending by buying bonds, a process that gave banks money to lend for free, which no one seemed to want. "QE2" will involve putting worthless new dollars directly into the consumer's pocket, or rendering worthless the ones already there. "Either way, everyone will have bulging wads of cash," said Chairman Bernanke. "Either that, or they will simply be happy to see me."
Bloggers on the Yahoo! web site suggested, however, that rather than give the Fed "ammo" to inflate, the move should be a signal to citizens to accumulate "ammo" of their own, and also canned goods--perhaps about three years' worth--which can be stored on shelves in the basement. Indeed, salted peanuts with the date code of MAR 02 are one of the key items in the government's commodity index showing there is no inflation anywhere.
- Martin Crutsinger and Christopher S. Rugaber "Tame inflation gives Fed ammo for bond-buying plan." Associated Press, November 17, 2010