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Former Fed Governor Wayne Angell on what the Federal Reserve should do to boost the economy.
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Federal Reserve Chairman Ben Bernanke appeared on Capitol Hill today and once again teased investors on what the Fed's future actions might be listen to what -- set.
Well this -- there -- range of possibilities and I and I don't want it.
You know give any signal that we're choosing one in my about that but but what is -- range includes different types of purchase program.
They go to one former fed member says.
Well this is exactly the type of tantalizing language the Fed should be avoiding and he's got advice for the chairman what the best course of action.
Really is let us in a Fox Business exclusive.
This former fed governor Wayne -- Wayne.
Instead of teasing then what should mr.
Bernanke be doing should he be saying absolutely no to QE3 is that what you're saying.
Well sooner or later the Margaret is going to discover.
That the chairman is holding off.
He has announcements about QE3.
Because it chairman frank -- does not want to get add to that.
Testing out what to say whether QE3 would do -- -- so.
-- he thinks.
That the Fed is better off adding this kind of in his back pocket.
It couldn't -- to put it out there -- -- turn out there that people will say.
That to -- sharply increase the -- reserves.
And the -- exist among those excess reserves are not gonna be loaned out of laughs.
They reduced -- rate of an interest they pay.
For holders are all deposits.
At the live look well that's your big thing you have said that the real way to get banks to lend once again.
Is to make the Fed less of an accommodate or an enabler by offering them 25 basis points to park their.
Money instead of lending it but we haven't seen since you came here are very passionately spoke about that -- thought it was a great idea.
We see no move on that why doesn't he see that by doing that he's enabling banks to simply leave -- my.
-- with the Federal Reserve instead of lending it to people.
I don't know.
It's it's a kind of a fair.
This staff at the -- raise -- part.
Of doing any tinkering so that no wanted to -- tapering.
And so they believe that taught -- -- bases ports that -- Without thinking why we put the 25 basis points a lot of the first place we put it on.
During and not much different situation.
Enrich we had.
The holding on reserves.
Who wrote what was handicapped by what we -- -- reserve requirement tax and that reserve requirement tax is what.
Drove the Euro dollar market and and and and administration in any Euro dollars.
Are rather -- -- And -- rates on treasury -- OK let me jump and it just say at this point that let me stick up for Ben Bernanke Lou Dobbs -- you to -- -- only ones that do this on a regular basis but.
He -- -- typical position.
I I respect the fact that he's not coming out and saying guess we'll do it.
The authority nearly quadrupled the balance sheet of the Federal Reserve over the past couple of years by print and doing all kinds of quantitative easing itself -- He really isn't ready.
-- -- -- I don't know.
I don't I think what he's -- reporters he -- raiding jets say that we do have this week can't do.
A rather than recognizing.
That -- slow economy.
It is really dear to the hangover from -- Housing price crash and house prices crashed.
Largely because the Greenspan fed.
Pump too much money out and drove house prices higher that'll help from congress and -- Fannie and Freddie.
But never laughed so bad had a lot of response broadly.
And that housing inflation.
Which -- my housing deep formation and and that housing deflation.
Results and.
-- reduced world the fact and that -- holding up consumer spending.
But -- -- plain mister Bernanke said today to let the economy is essentially stuck in the mob just not bad enough.
To warrant more action by the Fed and so what court in this cycle what can the Fed due to move it forward.
A well not march frankly can have brought I think Cameron wants to maintain.
The illusion.
That he's got some big bag in his back pocket -- needs to use it.
But I think the -- -- far better off to understand.
That QE3.
Is not -- -- dad be out there and -- war.
It -- really help anyway it would certainly drive.
The balance sheet higher and excess reserves.
Are -- with -- -- reserve what do you we're just -- larger well.
He did say uncertainty about the efficacy is why he's not doing it Wayne good to see -- thank you for joining us.
Thank you -- -- how -- any time Wayne Angell former Federal Reserve --
