{"id":172,"date":"2010-06-25T16:36:29","date_gmt":"2010-06-25T15:36:29","guid":{"rendered":"http:\/\/timiacono.com\/?p=172"},"modified":"2019-06-16T16:37:41","modified_gmt":"2019-06-16T15:37:41","slug":"fed-balance-sheet-to-rise-to-5-trillion","status":"publish","type":"post","link":"https:\/\/timiacono.com\/index.php\/2010\/06\/25\/fed-balance-sheet-to-rise-to-5-trillion\/","title":{"rendered":"Fed Balance Sheet to Rise to $5 Trillion?"},"content":{"rendered":"

Ambrose Evans-Pritchard is\u00a0almost\u00a0<\/em>shrill in his\u00a0assessment\u00a0of the choices now being faced by Fed Chief Ben Bernanke \u2013 a few vocal Fed hawks and a deficit-wary Congress on one side and, on the other, a slowing economy where the de-flation peril grows everyday.<\/p>\n

Federal Reserve chairman Ben Bernanke is waging an epochal battle behind the scenes for control of US monetary policy, struggling to overcome resistance from regional Fed hawks for further possible stimulus to prevent a deflationary spiral.
\n\u2026
\nKey members of the five-man Board\u00a0are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed\u2019s balance sheet from $2.4 trillion (\u00a31.6 trillion) to uncharted levels of $5 trillion.<\/strong>\u00a0But they are certain to face intense scepticism from regional hardliners. The dispute has echoes of the early 1930s when the Chicago Fed stymied rescue efforts.<\/p>\n

\u201cWe\u2019re heading towards a double-dip recession,\u201d said Chris Whalen, a former Fed official and now head of Institutional Risk Analystics. \u201cThe party is over from fiscal support. These hard-money men are fighting the last war: they don\u2019t recognise that money velocity has slowed and we are going into deflation. The only default option left is to crank up the printing presses again.\u201d<\/p>\n

Mr Bernanke has fought off calls from FOMC hawks for moves to drain stimulus by selling some of the Fed\u2019s $1.75 trillion of Treasuries, mortgage securities and agency bonds bought during the crisis. But there is little chance that he can secure their backing for further purchases at this point.\u00a0\u201cHe just has to wait until everybody can see the economy is nearing the abyss,\u201d said one Fed watcher.<\/strong><\/p><\/blockquote>\n

Ambrose ends with Societe Generale uber-bear Albert Edward\u2019s take on the current situation that the world is collectively\u00a0\u201cwalking on deflationary quicksand\u201d<\/em>.<\/p>\n

Oh Dear! We\u2019re heading toward another abyss!<\/p>\n","protected":false},"excerpt":{"rendered":"

Ambrose Evans-Pritchard is\u00a0almost\u00a0shrill in his\u00a0assessment\u00a0of the choices now being faced by Fed Chief Ben Bernanke \u2013 a few vocal Fed hawks and a deficit-wary Congress on one side and, on the other, a slowing economy where the de-flation peril grows everyday. Federal Reserve chairman Ben Bernanke is waging an epochal… Continue Reading Fed Balance Sheet to Rise to $5 Trillion?<\/span><\/i><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nFed Balance Sheet to Rise to $5 Trillion? - The Mess That Greenspan Made<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/timiacono.com\/index.php\/2010\/06\/25\/fed-balance-sheet-to-rise-to-5-trillion\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed Balance Sheet to Rise to $5 Trillion? - The Mess That Greenspan Made\" \/>\n<meta property=\"og:description\" content=\"Ambrose Evans-Pritchard is\u00a0almost\u00a0shrill in his\u00a0assessment\u00a0of the choices now being faced by Fed Chief Ben Bernanke \u2013 a few vocal Fed hawks and a deficit-wary Congress on one side and, on the other, a slowing economy where the de-flation peril grows everyday. 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