Dallas Fed president Dick Fisher tells the Wall Street Journal that it is paramount that the Fed not be seen as being a party to monetizing the US national debt. Government’s who issue debt in their own currency never default because they can always crank up the printing presses. Think Zimbabwe. Fisher, the most outspoken FOMC official on the Fed’s past mistakes vows not to allow this to happen. Let’s hope Helicopter Ben agrees.
Here’s the money quote:
“I think the trick here is to assist the functioning of the private markets without signaling in any way, shape or form that the Federal Reserve will be party to monetizing fiscal largess, deficits or the stimulus program.”
Don Kohn seems far less concerned about inflation’s potential but he does see the current policy as spurring GDP…
