Saturday 10-16-10

Bernanke Makes Case for Further Fed Moves to Boost Economy
Federal Reserve Chairman Ben Bernanke made a case for new steps by the central bank to boost economic growth, saying inflation was running below the Fed's objective of 2% and that the economy was on a course to grow too slowly to reduce unemployment.

"There would appear—all else being equal—to be a case for further action," Mr. Bernanke said in prepared remarks for a conference on monetary policy at the Federal Reserve Bank of Boston.

The Fed is considering whether to restart a program of purchasing long-term Treasury bonds to push down long-term interest rates and boost growth. It next meets Nov. 2 and 3, and investors expect the Fed to proceed with such a plan at the meeting, a view Mr. Bernanke did little to counter. However, he added that while such a program could be useful, he also made a case for proceeding "with some caution," given the uncertainties facing the Fed about whether such a program would work very well.

The Fed chairman's economic outlook was generally gloomy. Business spending has slowed, consumer finances are improving unevenly, housing has remained depressed and job growth next year isn't likely to be strong enough to bring down unemployment very much, he said.


The linchpin of his argument for new Fed action is the inflation picture. During the first eight months of the year, inflation as measured by the central bank's preferred measure is running at an annual rate of 1.1%, less than the 2% level that many Fed officials see as their long-run objective. Mr. Bernanke said it is of "utmost importance" that the Fed retain the public's faith in its ability to prevent inflation from shooting higher, but in the short run, "inflation is running at rates that are too low." He added that there is a risk of deflation, or falling consumer prices.
"In light of the recent decline in inflation, the degree of slack in the economy and the relative stability of inflation expectations, it is reasonable to forecast the underlying inflation—setting aside the inevitable short-run volatility—will be less than" the Fed's 2% goal for some time, he said.

The Fed, he said, "is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate," he concluded.

http://online.wsj.com/article/SB10001424052748704779704575553813746866210.html?mod=WSJ_hpp_LEADNewsCollection

Free: 3BR, 1BA ranch-style house. You haul it away
MOUNT WOLF, Pa. (AP) - Free house, fair condition. Delivery not included.

A central Pennsylvania township is offering up a house to anyone willing to haul it away.

East Manchester Township acquired the house and the property it sits on so it can eventually expand its municipal building. But rather than tear down the house, township officials are offering it to anyone who wants to move it somewhere else.

Township manager Terry Gingerich tells the York Daily Record the three-bedroom, one-bathroom ranch-style house is probably worth about $60,000. It's already been stripped of appliances and carpet, but Gingerich says the house is in otherwise fair condition.

Gingerich says whoever takes the township's offer and moves the house will also be responsible for clearing the lot so it can be built on later.
Online:

East Manchester Township: http://www.emanchestertwp.com/flyers/2010freehouse.pdf

http://wtop.com/?nid=456&sid=2080538

Gold Surges After Japan Says It Is Considering New QE And Geithner Guarantees Currency Wars
A quick look at gold price action demonstrates that someone somewhere is actively debasing currencies. An even quicker scan of headlines confirms this to be the case: per Reuters "Bank of Japan Governor Masaaki Shirakawa said on Wednesday the central bank will consider expanding a new scheme for buying assets ranging from government bonds to exchange-traded funds when deemed necessary." Harakiri Shirakawa continued: "We have taken a very bold measure ... If the need arises in the future, making further use of the new fund as part of monetary policy is one of our strongest policy options." Judging by the chart below, either gold has a tent in its pocket or was really happy to hear this announcement.

And just to confirm that the world is going to hell in a depreciating handbasket, Geithner essentially has guaranteed that a currency war is imminent. Also from Reuters:

U.S. Treasury Secretary Timothy Geithner said on Tuesday he sees "no risk" of a global currency war and wants to maximize incentives for China to allow its yuan to rise in value.

He told the Charlie Rose Show in an interview that China would work against its basic development objectives if it kept its currency undervalued.

"I'm very confident over time that this is going to happen," he said of Chinese currency appreciation. "We just want to make sure it's happening at a gradual but still significant rate."

Mm hmm. And for a vivid demonstration of Geithner's top-ticking predictive capacity, we bring you: "Welcome to the Recovery", the SecTres' August 2 OpEd, which appeared days before the massive July NFP miss set off America on its trajectory with fate and QE2. In other words, stock up on that Costco year-long ration. It will be a long, devalued winter.

http://www.zerohedge.com/article/gold-surges-after-japan-says-it-considering-new-qe-and-geithner-guarantees-currency-wars

Just one thing to keep track of you and yours

States linking prescription databases, fight abuse

RALEIGH, N.C. (AP) - Dozens of states already operating databases that can be searched for signs of prescription drug abuse will begin knitting them together next year into what could become a coast-to-coast network.
States are being asked to sign onto an agreement allowing police, pharmacies and physicians to check suspicious prescription pill patterns. Thirty-four states operate databases that monitor prescription drug abuse.

The proposed interstate compact will be unveiled in time for legislatures to consider it when they assemble next year.

Civil liberties and privacy advocates have objected to the state databases, which monitor prescriptions filled for a range of drugs from powerful painkillers to diet pills.

http://www.breitbart.com/article.php?id=D9IS0Q601&show_article=1