Former Fed Official blasts ‘quantitative easing’

“I will break the pride of your power” (Leviticus 26:19)

Andrew Huszar, a former Federal Reserve official who was involved with implementing part of ‘quantitative easing,’ has now denounced quantitative easing:

This Former Fed Official Thinks Quantitative Easing Has Been a Disaster

Andrew Huszar, a senior fellow at Rutgers Business School and former manager of the Fed’s $1.25 trillion agency mortgage-backed security purchase program, has now thrown his hat in the ring with those critics, penning an article in the Wall Street Journal in which he apologized for his role in the policy and called for its reversal.

TIME spoke with Huszar and asked him to explain and defend this point of view. The interview has been edited for length and clarity.

TIME: Why did you write the op-ed?
Huszar: The reason I wrote this piece is because I believe America had a significant wake up call with the financial crisis, yet five years later the country’s economy looks eerily similar to the way it did then. My belief is that the Fed is a significant reason why we haven’t reformed, and I wanted to try to start a conversation.

TIME: You argue that QE helps Wall Street banks but not the real economy. How does QE help Wall Street banks?
Huszar: QE had two goals, but one of them was originally highlighted as the primary goal by Fed Chairman Ben Bernanke: to make credit more accessible to more Americans…

TIME: Let’s talk about the risks because if you admit that there are some benefits to program, however small they are, it would make sense to continue it unless there are negative side effects that outweigh the benefits. What are those negative effects?
Huszar: I think one thing we’re seeing is that even the gains that are being made in the markets may be unsustainable; that the Fed is creating new bubbles. This Former Fed Official Thinks Quantitative Easing Has Been a Disaster | TIME.com http://business.time.com/2013/11/13/this-former-fed-official-thinks-quantitative-easing-has-been-a-disaster/#ixzz2l0ZuXsU9

By Andrew Huszar

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time…

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn’t long before my old doubts resurfaced. Despite the Fed’s rhetoric, my program wasn’t helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn’t getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash…

Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion…

And the impact? Even by the Fed’s sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn’t really working…

Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. http://online.wsj.com/news/articles/SB10001424052702303763804579183680751473884#

So, the Federal Reserve pumped $4 trillion in, barely helped the economy at all in the short-run, seems to be causing its own risky ‘bubble,’ and ignored the real problems in the economy of the USA. I have been saying this for years.

Furthermore, that pumping of money into the economy is setting the USA dollar up for the time in which it will really crash. Especially when this is combined with the deficit spending that the US Federal government is engaged in, as well as the USA’s trade deficits.

Quantitative easing is form of ‘money creation’ and is also sometimes called an “asset repurchasing” or “bond-buying-stimulus” program. Yet, this is mainly a sham operation that debases the value of the U.S. dollar (mainly the government prints up money electronically and the “asset” purchased is a U.S. treasury note, not a real asset like, let’s say, an oil well; yes there are sometimes also some mortgages purchased which have ties to real assets, but there are problems there as well). As I have repeatedly written, calling if counterfeiting is not too far off of a description of it.Quantitative easing will help destroy the USA dollar. As I mentioned before, the expected next Federal Reserve Chairman, Janet Yellen is in favor of continuing it (see Fed’s Yellen again signals her commitment to inflating US currency). Some believe that she will try to expand it.

Quantitative easing and debt increases are a form of “dishonest profits” that the U.S.A. is improperly reaping because of its position in the world, but that is not good:

13 “Behold, therefore, I beat My fists at the dishonest profit which you have made, and at the bloodshed which has been in your midst. 14 Can your heart endure, or can your hands remain strong, in the days when I shall deal with you? I, the Lord, have spoken, and will do it. 15 I will scatter you among the nations, disperse you throughout the countries, and remove your filthiness completely from you. 16 You shall defile yourself in the sight of the nations; then you shall know that I am the Lord. (Ezekiel 22:13-16)

US debt, combined with programs such as the Federal Reserves’ quantitative easing, are sending signals to the rest of the world that the US dollar needs to be replaced as the world’s primary reserve currency. And from China to Russia to the Middle East to Europe and elsewhere, various world leaders are moving to replace the USA dollar’s position. This will hurt the economy of the USA over 100 times as much as quantitative easing has helped it.

The pride of the USA’s power is being broken. That pride has long been associated with its military and economic strength. Various sins and increasing debt is weakening the USA in many ways.

Without national repentance the USA is doomed. Electronically printing up more money to aid Wall Street is not the solution. Since the USA seems to be going more into sin nationally, that type of national repentance seems unlikely. Yet, personal repentance is still possible. Do you understand what is happening to the USA and how all will be affected by it?

If so, what do you plan to do about it?

Some items of possibly related interest may include:

Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
Will the Anglo-Nations be Divided and Have People Taken as Slaves? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What about Jerusalem? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people? Here is a link to a video titled Will the USA and other Anglo-nations be Divided and Their People Made Slaves?
Just What Do You Mean — Repentance? Do you know what repentance is? Have you truly repented? Repented of what? Herbert W. Armstrong wrote this as a booklet on this important subject.
Abortion, the Bible, and a Woman’s Right to Choose Do you know what the Bible teaches on this? Has the Roman Catholic Church allowed abortions? What about the real Church of God? Some may also, or instead, wish to view the YouTube video Abortion, the Bible, and US Debt.
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Barack Obama, Prophecy, and the Destruction of the United States-Second Edition for Second Obama Term This is a 160 page book for people truly interested in prophecies related to Barack Obama and the United States, including learning about many that have already been fulfilled (which the book documents in detail) and those that will be fulfilled in the future. It also has a chapter about a Republican choice. This book is available to order at www.barackobamaprophecy.com. The physical book can also be purchased at Amazon from the following link: Barack Obama, Prophecy, and the Destruction of the United States: Is Barack Obama Fulfilling Biblical, Islamic Catholic, Kenyan, and other America-Related Prophecies? What About Republican Leaders? Second Edition for Second Obama Term.
Barack Obama, Prophecy, and the Destruction of the United States-Second Term-Amazon Kindle edition. This electronic version is available for only US$2.99. And you do not need an actual Kindle device to read it. Why? Amazon will allow you to download it to almost any device: Please click HERE to download one of Amazon s Free Reader Apps. After you go to for your free Kindle reader and then go to Barack Obama, Prophecy, and the Destruction of the United States-Second Term-Amazon Kindle edition.