Evans-Pritchard: Bernanke Shuts Money Printing Press

Thursday, 15 Apr 2010 09:20 AM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Federal Reserve Board Chairman Ben Bernanke has shut down his printing presses, and deflation is now on the prowl in the U.S., writes famed business journalist Ambrose Evans-Pritchard.

Evans-Pritchard says the “most audacious” monetary experiment in modern history ended on April Fools' Day, and soon the United States must walk without crutches, on “gangrenous” legs.

“The U.S. Federal Reserve has completed its purchase of $1.7 trillion of mortgage securities, agency debt and U.S. Treasuries, the conjuring trick of credit easing that allowed Ben Bernanke to create stimulus equal to 12 percent of GDP,” Evans-Pritchard recently wrote in his column in the Telegraph (U.K.).

“The Fed's money creation has been more or less the size of Washington's borrowing needs for the last year, as Beijing notes with suspicion. My view — anathema to readers, I fear — is that Ben Bernanke and Britain's Mervyn King saved us from potential calamity.”

For a while, the U.S. economy was “too close to the tipping point,” a moment when the sailing ship catches water and capsizes instead of righting itself by natural rhythm, writes Evans-Pritchard.

Now the Fed is easing up, hoping that private creditors step in and buy U.S. bonds, as yields spike.

“Bernanke is taking the fateful decision to knock away the props of the mortgage market even though the M3 broad money supply has been contracting at an epic pace of 6 percent since September,” says Evans-Pritchard.

“If M3 (the money supply) gives early warning of six to 12 months, beware. Bernanke does not look at M3, disdaining such monetarist eccentricities as medieval sorcery.”

Other observers are urging caution for the Fed.

The Washington Post and New York Times are reporting on the likely impact of the “exit strategy” being pursued by Bernanke, including redeeming and selling financial instruments.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

US Targets Al Shabab Leader in Somalia Airstrikes

Tuesday, 02 Sep 2014 05:31 AM

U.S. military forces attacked the extremist al-Shabab network in Somalia Monday, the Pentagon said, and a witness descri . . .

Sen. Mark Udall: 'I Absolutely Stand By' Call for CIA's Brennan to Resign

Monday, 01 Sep 2014 21:58 PM

Central Intelligence Agency Director John Brennan may have avoided losing his job over charges that the CIA spied on Sen . . .

US Forces Carry Out Operation Against Al-Shabaab in Somalia

Monday, 01 Sep 2014 20:44 PM

U.S. military forces carried out an operation on Monday against al Shabaab militants in Somalia, a U.S. Department of De . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved