IMF's former chief economist couldn't be more naive

Section:

Acting through intermediaries, the Fed essentially already does what he proposes.

* * *

Fed Should Buy Stocks If There Is Another Steep Recession, IMF's Former Chief Economist Says

By Greg Robb
MarketWatch.com, New York
Monday, September 10, 2018

The Federal Reserve buying stocks? How about financing the federal deficit? Or buying goods?

These were some of the suggestions for combating the next severe recession given to the central bank by former International Monetary Fund chief economist Olivier Blanchard at the Boston Fed’s monetary policy conference over the weekend.

... Dispatch continues below ...



ADVERTISEMENT

USAGold: Coins and bullion since 1973


USAGold, well known for its Internet site, USAGold.com, offers contemporary bullion coins and bullion-related historic gold coins for delivery to private investors in the United States, Europe, Canada, Australia, and New Zealand. It is one of the oldest and most respected names in the gold industry, with thousands of clients and an approach to investment that emphasizes guidance and individual needs over high-pressure sales tactics. The firm's zero-complaint record at the Better Business Bureau makes it an ideal match for the conservative, long-term investor looking for a reliable contact in the gold business.

Please call 1-800-869-5115x100 and ask for the trading desk, or visit:

http://www.USAGold.com

USAGold: Great prices, quick delivery -- all the time.



There is a general sense the Fed has to rethink its approach to combating recessions given the low-interest-rate environment that is persisting.

The problem facing the central bank is easy to describe.

The Fed's benchmark short-term fed funds rate is now around 2.875 percent. That's not so much room to cut rates in a downturn, considering that in a typical post-World War II recession, the Fed slashed rates by 5-6 percentage points to turn the economy around after a recession.

Blanchard said the Fed probably has enough tools to handle a run-of-the-mill recession. But if it is another severe recession like the financial crisis, Blanchard urged the central bank to resort to previously unheard of policies. ...

... For the remainder of the report:

https://www.marketwatch.com/story/fed-told-it-should-buy-stocks-if-there...

* * *

Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Thursday-Sunday, November 1-4, 2018
http://neworleansconference.com/wp-content/uploads/2018/07/NOIC_2018_Pow...

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16