A top Federal Reserve policymaker said Monday that low inflation meant there was no hurry to reduce a key central bank stimulus program, which has made “substantial progress” in lowering unemployment.
James Bullard, President of the Federal Reserve Bank of St. Louis, said the Fed’s bond-buying program was a “very reasonable” effort to stimulate the economy given that short-term interest rates are near zero.
And although he admitted the $85 billion in Treasury bond and mortgage-backed securities the Fed has been buying since September 2012 is a “torrid pace” of purchases, the low level of inflation has eased his concerns about continuing the program.
“We’ve got low inflation. That’s why I’ve been willing to be patient about this,” Bullard told CNBC-TV. “What’s your hurry? You don’t have to be in a big hurry.”
The government reported last week that the consumer price index, a key measure of inflation, rose just 1.2 percent for the 12 months ending in September. That is well below the Fed’s target of 2% annual inflation and its threshold of a 2.5 percent annual rate for tightening monetary policy.
James Bullard, Ben Bernanke and the Federal Reserve banking system have yet to support the policies that will result in substantial double-digit GDP growth while simultaneously broadening, private sector individual ownership in FUTURE wealth-creating, income-generating productive capital assets.
What is needed is to implement the Capital Homestead Act. (http://foreconomicjustice.org/?p=8942)
Right now the Federal Reserve creates money by loaning it to banks, who re-loan it multiple times because of fractional banking rules. With Capital Homesteading, money would be created by loaning it directly to citizens via banks at near-zero interest to invest in FUTURE wealth-creating, income-generating (full dividend payout) productive capital assets formed by producer companies. To build real wealth and also phase out our near-defunct social security scheme, the new full-reserve money would go into a long-term retirement account to be invested in dividend-paying, asset-backed shares of corporations. That way, money power would be spread to all citizens. The middle class would be invigorated using the principle of compounding interest, instead of being decimated by mushrooming public and personal debt.
The Federal Reserve could play a more positive role, removing artificial barriers to equal citizen access to acquiring and owning productive capital wealth. By creating asset-backed money for production, supported by growth-oriented tax policies, the Federal Reserve could truly help promote shared prosperity in a market system.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624, , “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490, and “A Solution To Eroding Retirement Security” at http://www.huffingtonpost.com/gary-reber/a-solution-to-eroding-retirement_b_4103834.html and at http://www.nationofchange.org/solution-eroding-retirement-security-1382020223.
