Federal Reserve Officials Admit QE3 Won’t Work

November 19th, 2012

Ben Bernanke is set to speak tomorrow about the Federal Reserve’s future plans. Recently, the private central banking cartel decided to initiate a third round of quantitative easing in response to a recent jobs report, believing falsely that inflation will somehow help stimulate job growth. Also, rather than just buying a set amount of Treasury bonds in one burst, the Fed opted to begin purchasing them in an ongoing manner, leading some to refer to this third round of quantitative easing as QE-infinity.

However, as Ben Bernanke considers QE4, some of the Federal Reserve’s own officials are speaking out against his wild monetary policy. Consumer prices have risen sharply over the past few months, especially in food and housing. Despite ultra-low interest rates, investors still remain on the sidelines, worried about the potential costs of new regulations. Let’s consider the arguments put forth by those dissenting Federal Reserve officials who fear Bernanke’s reckless inflationary policies.

Jeffrey Lacker, President of the Federal Reserve Bank of Richmond, Warns of Inflation Risks

Bloomberg is reporting that Richmond Fed President Jeffrey Lacker publicly opposes any future efforts to continue the Federal Reserve’s bond-buying program, dubbed quantitative easing. “We cannot continually buy more securities and create more bank reserves without jeopardizing our inflation goal,” Lacker warned in a recent talk in West Virginia. Bernanke, meanwhile, sees inflation as the goal of the policy, putting the interests of debt-saddled consumers over the needs of those who save or live off of fixed incomes.

Jeffrey Lacker also spoke out against the previous round of quantitative easing, similarly citing rising inflation as his rationale for opposing the move. Lacker has been a frequent critic of Federal Reserve policy throughout 2012 and has remained in opposition to all of the decisions made by the Federal Open Market Committee since it started down this inflationary course.

Dallas Federal Reserve President Admits Reservations About QE3

Jeffrey Lacker is not the only Fed president worried about worsening inflation. The Wall Street Journal published comments by Dallas Federal Reserve President Richard Fisher, who expressed his skepticism about the effectiveness of quantitative easing. Fisher feels, like many fiscal conservatives, that the Fed’s policy is encouraging wasteful government spending. As the government spends more money, buying power is extracted from the private economy, thus impeding job creation.

Said Fisher of the policy, “What we’re accommodating is fiscal malfeasance and at some point it has to stop.” He also explained that recent economic data does not suggest that the policy will result in serious growth, and that investors from the business community do not believe that the easing techniques will work. With Congress careening towards a fiscal cliff, Fisher feels that the Federal Reserve is providing an incentive for elected officials to metaphorically step on the gas.

Five years after the Greenspan-caused crash that started this whole mess, the economy continues to suffer. Since that time, the Federal Reserve has rolled out a series of arcane, useless policies which have done little to encourage growth or business investment. Meanwhile, consumer prices continue to rise, forcing low income families and senior citizens into an untenable situation.

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About the Author: Barry Donegan

Barry Donegan is a singer for the experimental mathcore band Look What I Did, a writer, a self-described "veteran lifer in the counterculture", a political activist/consultant, and a believer in the non-aggression principle.