Following the central bank’s announcement of even further economic stimulus, some of the world’s leading financiers are urging the Federal Reserve head to step down for ruining the United States economy.
Speaking with CNBC Friday, Marc Faber, finance guru and author of Gloom, Doom and Boom, called central bankers “counterfeit money printers” and said Bernanke, who was first appointed by President George W. Bush and re-appointed by President Barack Obama, was one of the leading proponents of ultra-expansionist economic monetary policy that led to the downfall of the nation’s economy.
“If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash,” said Faber in the interview.
“QE helps rich people whose asset prices go up and who’s net worth then increases but it doesn’t flow to the man on the street who is faced with higher costs of living with price rises. You just have a small economy that is booming but the majority of the economy is damaged by QE.”
Last week, the Fed introduced the third wave of quantitative easing. The initiative aimed to throw more money into the economy and includes purchasing $40 billion worth of mortgage-backed securities each month for an unset period of time.
Although Faber is accusing the “money printers” of being the culprits for the economic crisis transpiring in the U.S., Mike Konczal, fellow at the Roosevelt Institute, said in the same interview that QE3 would positively expand Fed policy. He argues that it would be excellent for Main Street because it tackles the problems of unemployment and would eventually create future wealth.
“If anything, monetary policy has been too tight in recent years. We’ve seen a collapse in GDP growth, no wage growth and huge rises in unemployment,” said Konczal. “Wealth is collapsing because of a collapse in the housing market and prolonged, mass unemployment.”
Nevertheless, Faber isn’t the only person to recently call for Bernanke’s resignation.
Texas Republican Governor and former 2012 presidential candidate Rick Perry is also urging the Fed Chairman to step down amid the Fed’s latest stimulus program. The newfound Fed critic explained that QE3 is not a solution and it symbolizes “a huge step backward.”
“While it might provide a temporary boost – or at least maintain the sluggish status quo – before the November elections, it will add untold billions of dollars to the Fed’s balance sheet to give the illusion of an improving economy,” stated the Texas Governor. “Yet the Chairman knows full well that the economy continues to be dragged down by incompetent leadership in Washington that has us stuck, in his own words, on an ‘unsustainable fiscal path.’”
He added that this particular “bailout” will lead to long-term consequences, such as an increase in inflation and a weaker dollar.
“We have seen rising commodity prices in recent years even as real incomes are declining – making life in the middle class all the more difficult,” said Perry. “Last year, I suggested that Mr. Bernanke should resign. Now, I believe even more strongly that he should go, and take his failed policies with him.”
Perry wasn’t the only 2012 presidential candidate to take an interest in monetary policy and Bernanke’s career endeavors.
Former Speaker of the House Newt Gingrich told The Street that he would ask the Congress to end Bernanke’s term. Former Massachusetts Governor Mitt Romney said in an interview in August with Fox Business News that he would replace Bernanke – in 2009, however, he told Larry King that Bernanke was “doing a good job.”
Texas Congressman Ron Paul and bestselling author of “End the Fed” has been a longtime critic of the Federal Reserve. He has repeatedly stated that it’s not the man running the central bank, but rather it’s the entire system that needs to be replaced.