Following the Federal Reserve’s Operation Twist announcement yesterday, former Fed Vice Chairman Alan Blinder provided his thoughts on the new plan and the potential for additional monetary policy tools at the Fed’s disposal.Operation Twist “should have a marginal, not revolutionary effect on economic behavior,” Blinder stated in an interview with Yahoo Finance’s Breakout.
Although the Fed is not “totally out of ammo,” according to Yahoo, “they don’t have much left in the way of high impact weaponry.”
Blinder – now an economics professor at Princeton – went on to say that “Once you run out of bazookas you shoot the machine gun. When you run out of machine guns, you shoot the rifle. You run out of rifles, the pea shooter, the bb-gun, whatever you’ve got.”
As for Chairman Ben Bernanke specifically, Blinder contended that “I don’t believe the Bernanke is in the ‘I give up mode.’ I don’t think he’ll ever give up. He’ll keep shooting pea-shooters, the bb-guns, the sling-shots. Whatever he’s got left.”
Bernanke’s unwavering fight against deflation, as Blinder described, is music to the ears of gold bugs.
Source; http://www.goldalert.com
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