Federal Reserve Chairman Ben S. Bernanke said risks to both U.S. growth and inflation have increased, abandoning officials’ June assessment that threats to the expansion had “diminished somewhat.”
There are “significant downside risks to the outlook for growth,” and “upside risks to the inflation outlook have intensified,” Bernanke said in semiannual testimony on the economy to the Senate Banking Committee in Washington.
Bernanke cited higher energy prices, reduced access to credit and a further deepening in the housing recession as dangers to growth. At the same time, he said: “We must be particularly alert to any indications, such as an erosion of longer-term inflation expectations, that the inflationary impulses from commodity prices are becoming embedded” in wages and prices.
ARGH. Way to pass the fucking buck. I’ll let Lew Rockwell speak for me:
It’s hard to be shocked at a lying federal official, but to see the head inflator, Ben Bernanke, warning the senate about inflation as if it were some extraneous force of nature is laughable. [Quoting above]
In other words, the Fed – the government agency created to inflate, and the only source of inflation – is keeping an eye on the wayward private sector, in case foolish people wake up to the Fed’s schemes, and realize they have engineered very high inflation indeed, at the same time as they have engineered a global depression, and prices zoom as the economy falls of the edge. In that case, it will be essential – from DC’s standpoint – to blame business people and consumers, so as to divert attention from their criminal selves. It is our job not to let them get away with it.
The Bloomberg article continues:
Retail sales rose 0.1 percent from the previous month, the Commerce Department reported today, less than economists forecast. Producer prices jumped 1.8 percent, the most since November, the Labor Department said. From a year ago, prices climbed 9.2 percent, a surge unseen since 1981.
Fed governors and district bank presidents now see the economy expanding 1 percent to 1.6 percent this year, up from 0.3 percent to 1.2 percent in their April outlook. Consumer prices will rise 3.8 percent to 4.2 percent this year compared with a projected range of 3.1 percent to 3.4 percent in April. The economy should expand at a 2 percent to 2.8 percent rate in 2009, identical to the April forecasts.
Anyone reading this expecting to get a >= 9.2% raise this year?
Not all this turmoil is lost on the public thankfully. I’ve gotten a chance to rant about the Federal Reserve and this economic setup, with an actual attentive audience, more often then I’ve in the past. In fact my boss was talking about picking up something to better understand the Federal Reserve System. I’m going to bring in a copy of The Case Against the Fed by Murray Rothbard. Maybe I’ll be able to get it passed around the office. It’s a pretty quick read and given the urgency which people likely feel concerning this situation it may not be a difficult sell.