Kansas City Fed President Thomas Hoenig was the latest U.S. central banker to criticize the monetary policies spearheaded by Fed Chairman Ben Bernanke.
In a speech on Wednesday, Hoenig stated that “When you encourage consumption by inhibiting your interest rates from rising to their equilibrium level, you will in fact buy problems, and we have in fact bought problems.”
The Kansas City Fed President’s comments were likely his last while in office, as he is set to retire on October 1. Although Hoenig has not been a voting member of the Federal Reserve Open Market Committee (FOMC) since the start of 2011, he was the only central banker to cast a dissenting vote throughout 2010 over the Fed’s use of the “extended period” language with respect to its use of a near-zero Fed funds rate.
Hoenig’s speech followed harsh criticism yesterday from Dallas Fed President Richard Fisher, a current voting member of the FOMC. In his own speech Tuesday on the Fed’s policies, Fisher stated that “The monetary accommodation we have thus far implemented has failed to deliver. There is significant risk that the policies recently undertaken by the FOMC are likely to prove ineffective and might well be working against job creation.”
Returning to Hoenig, Reuters reported that he also “leveled blame at lawmakers as well, saying the Fed’s stimulative policies were a band-aid for a failure to credibly commit to lowering the United States’ long-term debt. Lack of political courage to curb spending and government subsidies and rein in debt would likely lower the U.S. economy’s long-term growth potential from about 3 percent a year to as low as 2.5 percent.”
“We will not fall off the cliff,” Hoenig added. “But what it does is it lowers the potential growth rate of your economy.”
“Despite his warnings about Fed policy, Hoenig retained confidence in the underlying resilience of the economy and said he was not worried the dollar would be knocked from its perch as the preferred currency of global investors,” the report continued.
“‘The dollar will be the reserve currency of the world for some time to come,” Hoenig asserted.
Aurizon Discovers Two New High Grade Gold Zones at Marban
- The best results from the new High Grade Western Zone include 906.2 grams per tonne (g/t) of gold over 2.9 meters (m) at hole MB-11-198 at a vertical depth of 175m and 5.9 g/t of gold over 15.7m at hole MB-11-195 at a vertical depth of 125m.
- The Eastern Down Dip Zone is located approximately 400m east of the former Marban mine shaft and includes 6.1 g/t of gold over 12.6m at hole MB-11-242 at a vertical depth of 350m.
- A resource estimate will be completed by the end of the year on the Marban property and will be based on new results obtained.
