Larry Meyer – Fed Alone Can’t Get the Job Done

Larry Meyer,former Fed governor and co-founder of Macroeconomic Advisors, appeared on CNBC’s Squawk Box Wednesday (August 1), just ahead of the results of the two-day FOMC meeting to be announced later today near 2:15 pm ET.  Mr. Meyer came out of the gate with the idea that the Federal Reserve considers quantitative easing (QE) as a “high-cost” action and he doubts they are ready to “pull the trigger” on more QE.

That sets up a debate between Larry Meyer and guest host Steven Roach (Yale academic and Fed critic), on the surface about economic models to measure Fed policy results, but underneath is a deeper dispute (that goes to the credibility of the Fed). 

 

To say that Mr. Meyer was on the defensive regarding his tenure at the Fed (when Alan Greenspan served as Chairman) … might be an understatement.  In any case it made for “good TV.” 

Meyer’s best comment might have been, “The Fed alone can’t get the job done.” 

The segment underscores the perception that the economic elites are anything but ‘of the same mind’ on unconventional Fed policy. Lost in the debate is the real problem – that our elected leaders have so blown out the budget of the United States that about all we have left is hope the U.S. central bank will print enough money to bail out the politicians and keep the music playing a while longer.

Judging by Mr. Meyer’s jittery composure in this segment and with the FOMC news just a few hours from now, I can’t help but get the feeling that something is about to surface to shake up the summer vacation season, either in Europe or here in the U.S.  As they say in the diplomatic corps, “tensions are high and the situation is fluid.”  

Colette Chapman for Got Gold Report      

Source: CNBC Video

http://video.cnbc.com/gallery/?video=3000105930