Lake Erie Conservative

thoughtful discussion(s) about issue(s)

… No , You Idiot . That Is Their Job …

Posted by paulfromwloh on Sunday,July 28th,2013

.. I am amazed at how many POTUSes do not understand what a central bank is , and what their job is . Barack Obama is , unfortunately , no exception .

.. A central bank ‘ s job is very simple , yet , equally complex . One of a central bank ‘s simplest jobs is dealing with inflation . Inflation in any economy is a very bad idea . The total abscence of inflation (or deflation) is also a very bad idea . Maintaining it at a low level , and a stable level , would be the best idea .

The other principal task of a central bank is managing the stability of the markets . Oversight , some regulation , and some

Barack Obama

Barack Obama (Photo credit: jamesomalley)

intervention come to mind , but they are not exclusively the only things a central bank does .
Another is the stability of the currency . This one is separate from the above .
A modern economy cannnot exist , in reality , without a currency . A modern economy cannot really be successful without a stable currency . Boring with a currency is better than lively .

.. There are some tasks for which a central bank does bear some responsibility . One is government finance . It does not bear the direct burden , as the Treasury Department handles that . Indirectly , it does . If it does not do its other jobs , then the government cannot finance its spending , or its debt . Another is the economy itself . Many millions and tens of millions of actions , each and every second , are the lifeblood of the economy . A central bank can choose to have a great deal of influence over the economy , depending on how it uses the tools that it has at its disposal . The injection of $80 billion a month in cash from the purchase of mortgage – backed securities is a classic example . However , that gravy train is coming to an end . The economy will have to stand on its own two feet .

.. Unfortunately , Barack Obama is clueless about the economy . How it works , what capital is , how it is raised and spend , and a great many things . He has never held a job in the private sector , and has never had to deal with the headaches that government regulations can create , and the expenses that they cause . He is hardly one to champion the cause of “the little guy .”

.. Read thru this moneynews.com piece , and you will understand that we are headed for big trouble in the coming months . The markets will not like whomever POTUS chooses . The markets want and need a hard case . Obama wants a “softie.” …

President Barack Obama says his next Fed chairman should take ordinary people into account when setting monetary policy.

Obama told The New York Times in an interview on the paper’s website Saturday that he wants someone who won’t just work abstractly to keep inflation in check and maintain stability in the markets. He said he wants the next Fed chairman to also promote policies that will help make ordinary people’s lives better.

The president began a series of speeches last week promoting ideas for easing the burdens on the middle class.

Obama is considering replacements for Ben Bernanke, whose term as Fed chairman expires early next year.

Former Obama economic adviser Larry Summers and Janet Yellen, the Fed’s current vice chair, are among the leading candidates for the job.

A senior White House official told The Associated Press on Friday that Obama was not expected to announce a replacement for Bernanke before the fall. The official was not authorized to speak by name about internal White House deliberations over personnel decisions.

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