27/08/2011 – Behind Closed Doors at the Fed: Ten Years of Research into America’s Central Bank

Robert Prechter said this in the July Elliott Wave Theorist:

“Foreign powers have been irate over the Fed’s deliberate

inflating policy. At its outset, QE2 generated ‘a chorus of criticism’

from China, Russia, Japan, Brazil and Germany. It prompted one

of China’s three credit rating services to lower its rating

on U.S. debt from AA to A+, on the basis that QE2 is a scheme

to defraud the Treasury’s creditors.

(Inflation is a scheme to rob everyone.) Whether or not that rating

decision was politically motivated, it represents foreign resistance

to the Fed’s machinations.”

[Note: The credit rating service in China is not alone in downgrading

U.S. debt. History was made August 5 when Standard & Poor’s

downgraded the United States’ credit rating from AAA to AA+.]

External resistance to the Fed’s policies is one thing. But the

machinations of America’s central bank are also encountering resistance

from within the Fed itself, albeit “behind closed doors.”

Let’s return to the July Theorist:

It is not just outsiders who criticize the Fed’s policies.

Kansas City Federal Reserve Bank President Thomas Hoenig voted

against all seven of the Fed’s policy decisions in 2010.

He disagreed with QE2 on the basis that it would generate inflation.

He went public with his views at a Republican meeting in Washington

on December 2. Richmond Fed President Jeffrey Lacker and Philadelphia

Fed President Charles Plosser have also expressed concerns. Even

Kevin Warsh, at that time a Fed governor-at-large who had never

failed to support Bernanke, in a New York speech “warned of ‘significant

risks’ associated with the program” (AP, 11/9) and expressed

doubt that it would help the economy at all. His op-ed piece for

The New York Times “expressed deep skepticism” of the plan. Richard

Fisher, president of the Dallas Fed, in a San Antonio speech called

QE2 the “wrong medicine” for the economy.

The “wrong medicine” indeed! If anything, the economy

seems as unhealthy now as it was before QE2.

In a June 30 CNBC interview, former Fed Chairman Alan Greenspan

himself said, “There is no evidence that [the] huge inflow

of money into the system basically worked.”

Prechter has extensively studied and written about the Fed for more than a decade. He has “pulled back the curtain” on the nation’s “lender of last resort” and his findings are more relevant today than ever. Prechter’s research is now available in a Free Report titled: Understanding the Fed: How to Protect Yourself from the Common and Misleading Myths About the U.S. Federal Reserve This special free report is now available for you to read by simply joining Club EWI. Membership is also free, and there are no obligations when you join. When you become a Club EWI member, you gain instant access to a wealth of EWI Educational Resources. Get your Free Report about the U.S. Federal Reserve now by following this link for the quick and easy sign-up!