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Faber: Bernanke Is ‘Murdering’ Middle Class With His Policies

Thursday, 07 Apr 2011 03:04 PM

Federal Reserve Chairman Ben Bernanke is "murdering" the middle class by excessively printing money, which only ultimately fuels inflation and hurts most Americans, says economist Marc Faber, publisher of The Gloom, Boom & Doom Report.

Faber says Bernanke is excessively printing money but it isn't going into a market that could help most Americans, like housing, but rather into commodities, which can only hurt by sparking inflation.

The Federal Reserve is keeping monetary policy loose in an effort to spur economic growth, including a $600 billion bond-buyback program known as quantitative easing, which pumps banks full of money in hopes they will lend.

It's not working, at least for most people, Faber tells King World News.

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Marc Faber
(Newsmax photo)
"Money printing doesn't go into housing because we have an oversupply of housing, but it goes into equities and for Mr. Bernanke, unfortunately into commodities. And this is lifting the cost of living of the median household, of the typical household in the U.S.," Faber says. "Mr. Bernanke is a murderer, he’s a murderer of the middle class and the working class."

Rising prices of commodities such as oil can chip away household purchasing power, although the Federal Reserve says overall inflation rates don't appear set to merit action as of yet.

Commodities prices spiked in the 1970s as well, though the financial health of the economy then was better than it is today, says Faber.

"Of course the financial position of the U.S. is much worse than what we had in the seventies. In the seventies, total credit as a percent of the economy was just at 140 percent, we're now at 379 percent and we have the unfunded liabilities which we didn’t have at that time," Faber says.

"So I would say the financial position of the U.S. has continuously worsened over the last 30 years."

Bernanke has said that inflation remains in check, as consumer prices stripped of volatile energy and food prices remain on target.

He has also said the Federal Reserve is ready to move should headline inflation rates threaten to rise beyond expectations.

"So long as inflation expectations remain stable and well anchored" and the rise in commodity prices slows in line with his forecasts, then "the increase in inflation will be transitory," says Bernanke, according to Bloomberg.

"We have to monitor inflation and inflation expectations extremely closely because if my assumptions prove not to be correct, then we would certainly have to respond to that and ensure that we maintain price stability."

Other Fed officials have also said that current monetary policies must remain in place in order to ensure economic recovery, including Cleveland Federal Reserve Bank President Sandra Pianalto.

"My outlook for economic growth and inflation assumes that we complete our asset purchase program as originally scheduled, and keep our federal funds rate target at exceptionally low levels for an extended period," Pianalto says, according to Reuters.

The Fed's $600 billion asset purchase program is due to end in June.

"I don't expect recent rises in food and energy prices to cause a broad spillover into a wide array of consumer prices, or in other words a lasting increase in inflation."

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Federal Reserve Chairman Ben Bernanke is murdering the middle class by excessively printing money, which only ultimately fuels inflation and hurts most Americans, says economist Marc Faber, publisher of The Gloom, Boom Doom Report. Faber says Bernanke is excessively...
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2011-04-07
 

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