Bernanke Attempts to Soothe Doubters

In attempts to keep us from having deflation, Ben Bernanke announced that the Fed would be pumping $600 billion into the economy by min 2011. Critics fear that that this will cause dangerous inflation down the road and hurt us by weakening our dollar. Bernanke said “our purpose is to provide some additional stimulus to help the economy recover and to avoid, potentially, additional disinflation.” Former president of the New York Fed does not agree and feels uneasy about this decision. “Thus there is a risk, however small, that once that nudge takes hold, it may not be easy to cap inflation and inflationary expectations at levels that are still broadly compatible with price stability.” Bernanke said that this approach “will work, or not work, in much the same way that monetary policy — ordinary, more conventional, familiar monetary policy — will work.”