Dear Jim,

Apparently pulling trillions out of an already weak economy with double digit unemployment is child’s play.

Who are these talking heads kidding!

CIGA Marc 77

Fed Can Avoid Inflation Danger: NY Fed President
Published: Monday, 31 Aug 2009 | 7:38 AM ET

Fears of inflation because of the Federal Reserve’s massive quantitative easing measures are overblown, because the Fed has the ability to pull the liquidity out of the market fast enough to prevent price rises, William Dudley, New York Fed president, told CNBC Monday.

Since the onset of the financial crisis, the Fed has cut interest rates near zero and injected about $1 trillion in the markets to prevent credit from freezing up.

Many analysts have warned the measures carry a high risk of inflation and on Monday a survey of economists in the National Association for Business Economics showed that 41 percent of them believed the measures to be inflationary.

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Inflation Will Accelerate This Decade, Business Economists Say
By Carlos Torres

Aug. 31 (Bloomberg) — The Federal Reserve will be unable to prevent the trillions of dollars in government stimulus pumped into the U.S. economy from stoking inflation later this decade, a survey of business economists showed.

The price gauge tracked by the central bank will rise 3 percent a year on average from 2014 through 2018, according to the median estimate in a poll taken by the National Association for Business Economics. The rate exceeds the 2 percent pace that the respondents said was the Fed’s unofficial target.

The report is in line with surveys of consumers and indicates the central bank may have to work harder to damp inflation expectations after pouring more than $1 trillion into credit markets in a strategy known as quantitative easing. Economists in the survey also said the Obama administration’s $787 billion stimulus program would push consumer prices higher.

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