New Budget Committee Chairman Will Push For One-Mandate Fed, Bernanke Couldn't Care Less

Tyler Durden's picture

Either the republicans have fully adopted a role as the "charade" party, or they are actually serious about believing that by limiting Bernanke to controlling just inflation, the Chairman will actually start acting on behalf of the peasants (note: he won't - he will just ignore the fact that food prices are at an all time record, and focus instead on the ongoing collapse in home prices, which simply means that middle class has less equity and is paying more for staples). Either way, they are not wasting any time. Reuters reports that representative Paul Ryan, the new chairman of the House of Representatives' budget committee, said he will push
for legislation paring back the Federal Reserve's mandate to focus
solely on controlling inflation, not ensuring full employment. Well, the problem there is that Bernanke will say that instead of doing QE in perpetuity, or until the unemployment rate goes back to 5% (whichever comes first), he will simply print money (pardon, feed primary dealers with infinite 1s and 0s, which in no was have an impact on cotton prices now trading at unheard of levels). More from Reuters: "
Republicans have made no secret of their desire
to impose more limits on the U.S. central bank and have been critical of
it on a number of scores, including its plan to buy an additional $600
billion in government bonds to try to speed up a sluggish economic
recovery." As if the same republicans don't realize that the only reason the Fed is buying said additional $600 billion is to monetize their own damn deficit created when they passed the tax cut extension for the rich, now that China's holding of Treasuries have basically not budged in the past year. Well, someone has to monetize all that debt. And as Zero Hedge has been screaming since September, the only reason for QE2 (and QE3 next) is to fund the $3 trillion in budget deficits over the next two years, as nobody else wants it any more.

More trom Reuters:

Opponents of that action, including a number of Republican lawmakers, say the program risks weakening the U.S. dollar and sowing the seeds of inflation without doing much to lift economic growth and lower unemployment.

The Fed currently has a dual mandate -- keeping inflation curbed and promoting full employment -- but Republicans in both the U.S. House of Representatives and the Senate have pledged that they will try to change that.

Representative Mike Pence of Indiana has said that he intends to introduce legislation in the House to narrow the Fed's mandate to keeping inflation at bay. Sen. Bob Corker, an influential Republican on the Senate Banking Committee, has also backed the shift.

When Pence and Corker announced their support for changing the mandate last year, a Fed spokeswoman said the central bank was not seeking a change and that the dual mandate was appropriate.

So much for the Kool Aid - all who think that a dodecatuple (or zero mandate) will stop the private and very much unaccountable bank that is the Fed, from running the world, should consider lowering their recommended daily allowance of hopium.