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Economist Peter Morici and Empyrion Wealth Management President Kimberly Foss on potential further action by the Federal Reserve.
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It right Ed -- written president of the Boston fed says he wants to fire up the printing presses for another round of quantitative easing.
And he wants to keep this next round of bond buying open ended until the economy gets back contracts that -- one long.
IV drip of money.
I want to bring in economist Peter.
She'd also can really cost from an puree and wealth management.
I'm guys thanks to both of you for joining us Peter what do you think about this do you think that this will help the economy in the long term if we just open up the -- And continued to pour fed QE3 4567.
Until the economy is better.
I think -- be a terrible idea to send that signal to markets it would raise inflationary expectations.
In fact bad banks might become less likely to lend.
Simply because -- today's low rates they would be afraid of being burned later on.
When the economy did recover in interest rates were substantially higher.
All and so all the inflation this would create.
Yeah Kimberly I mean it seems like -- -- when do is -- equities and I wonder how long that would last.
Well I think Barack and angry at -- -- -- as well I mean this is short term gain long term -- this is not good for us.
Globally or any US long term growth.
They attack and that -- diction zoo QE3 QE four Q five.
And the Fed the enabler I mean but China is dead dealer what happens when they stop body exactly what he said you know inflation is right around a quarter.
Yeah I mean Peter I gotta put my cards on the table here the idea was we were supposed to have to economists on to debate one why this was a good idea why this is a bad idea.
We couldn't find anyone to come on -- argue the Fed's point I -- there's no literally there is no economists out there who thinks that this is a positive thing I mean -- -- out there watching please call us because.
We've been using the phone all day what that tell you about the Fed does -- say that they have another motive because it can't be economics.
Well I believe the president of the Boston fed is strictly out election after -- there are many regional.
Federal Reserve presidents and he does -- speak for the Federal Reserve -- I doubt that mr.
Bernanke would embrace.
A policy like this or that -- most of the members of the the Fed policy making committee would embrace this this is just one voice.
-- About -- that so I mean Kimberly.
The Fed is on a whole different level at this point we mention this in the open about how Ben Bernanke wants to measure.
Happiness now.
And he wants issue -- happiness studies he would seek a better and more direct measurement.
Of economic well being.
This is what I mean these these are quotes from him it it worries me that the Fed wants to get out there and measure -- subjective motion I feel like they have enough on their plate.
Maybe they should focus on the currency I'm not even sure they should be focusing on jobs but my happiness.
I feel like is too far afield for them what do you think.
Yes not I know -- -- -- it said that mr.
Bernanke was responsible for America's happiness I mean it's like what are they doing.
Attorney that the QE3.
Into a prozac -- they wanted to take it again just so that we can -- pacifier thousand and someday wake up with massive inflation.
And -- it just doesn't work so.
Concentrate on stability of prices long term interest rates and jobs.
And and and and keep -- and the unemployment low that's what they're mandated that happen.
So I haven't been acting -- Peter what do you think about that I mean it it concerns me that they would try and spread their power even further or their mandate or their goals.
Even further well I got closer during already.
Excuse me I guess he's forgotten everything he learned in school and is taught economist quit trying to measure happiness in the early nineteenth century.
What a man by the name -- be -- them -- early economist you know became totally frustrated by trying to come up with what he called a -- -- but calculus to accomplish that.
I economists don't believe that you can measure happiness it's an absurd statement then I'd like to know more about the context in which it was said.
Yeah no I mean he -- this at a graduation speech -- -- it on Monday in his speeches well a relatively new specialty an economics.
Known as the happiness studies I don't know what to do more honestly erratic time on.
Straight out but it's certainly deserves more discussion I think because it makes me very nervous guys thanks for coming on we appreciate it.
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