Ben Bernanke is at it again. It appears the Fed Chairman is preparing for a third round of bond purchases (quantitative easing or QE3) that will further inflate the U.S. Dollar. Reuters reports Bernanke told the Senate Banking Committee during the semi-annual monetary policy report the economic recovery was being held back by anxiety over Europe’s debt crisis and the path of U.S. fiscal policy. He also expressed concern over the stagnant job market.
Since December 2008 the Fed has held overnight borrowing costs near zero and has bought $2.3 trillion in government and mortgage-related debt to keep long-term interest rates artificially low. The Fed promised to hold rates at rock bottom levels until at least 2014.
Bernanke told lawmakers it was essential to find a way to avoid the “fiscal cliff” of sharp spending cuts and tax hikes that are scheduled to take place in the United States at the start of next year, warning it could tip the already weak economy into a recession. The Washington Post reports if Congress can’t resolve its budget impasse before the year ends. The “[c]uts in taxes on income, dividends and capital gains would expire. So would this year’s Social Security tax cut and businesses tax reductions. Defense and domestic programs would be slashed. And emergency benefits for the long-term unemployed would run out.”
Bernanke also told lawmakers the central bank was considering a range of tools it could employ to help the economy but he hewed closely to the message of watchful waiting that the central bank’s policy panel delivered in June. “Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to economic growth, the committee made clear at its June meeting that it is prepared to take further action.”
When asked about the possibility of QE3 Kate Ager, with Ladies in Keene, said, “I would prefer to use alternative currencies or barter instead of using Federal Reserve Notes (FRN’s).”
There are several alternatives to the FRN. In Keene, NH people have begun using 1/10th ounce and half ounce silver bars. These pieces of silver are even accepted by several businesses in the city. Other alternatives include Shire Silver, dime cards and silver, copper and gold rounds minted by the AOCS.
I realize it is not possible for everyone to completely avoid using the FRN, however it’s worth the effort to convert as much as possible to the use of honest money!