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RICHARD FISHER: THE USA WILL BECOME INSOLVENT AT THIS PACE

Just when you think a Fed official might be starting to get a few things right they drop a bomb on you and say something so remarkably stupid that it reminds you why it’s time to get rid of the Fed and its talking heads.  In a speech today in Frankfurt, Richard Fisher, Dallas Fed Chief, made some headline grabbing comments about the US economy, its fiscal situation and QE.  In short, he thinks we’re becoming bankrupt, we’ve monetized all the debt, and the economic recovery is moving along just swimmingly (how one doesn’t find those comments contradictory is beyond me).  Some snippets:

“If we continue down on the path on which the fiscal authorities put us, we will become insolvent. The question is when.”

“The short-term negotiations are very important. I look at this as a tipping point.”

“In essence what we have done as a central bank is to monetize the entire US debt through the end of June,”

“Had I been a voter last year, which I am this year, I would have joined Hoenig and would have voted against what is known as QE2.”

“In my opinion, no further accommodation is needed after June, either by tapering off the bottom of the purchases of treasuries, or by adding another tranche of purchases outright,”

“The Fed has done enough, if not too much, and we should do no more.. In my opinion no further accommodation is necessary after June either by tapering off the bottom of treasuries or by adding another tranche of purchases outright.”

“We are seeing speculative activity that may be exacerbating (price rises in ) key commodities such as oil.”

At least he gets the speculation part right….But what did we expect with leaders like this?

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