One of the more damning criticisms of the Federal Reserve was published this afternoon by Bill Fleckenstein, the long-time investor and gold bull.
Instead of focusing primarily on Fed Chairman Ben Bernanke in his latest weekly column for MSN Money, Fleckenstein took Boston Fed President Eric Rosengren to task for his comments earlier this week calling for an open-ended quantitative easing (QE) program.
“For one, the articles made it painfully obvious that Rosengren is a central planner at heart,” Fleckenstein asserted. “If he had his way, he would unleash as much money as it took to force the economy to deliver the lower job and higher inflation rates he wants.”
Fleckenstein went on to say that “His proposal to do that would basically be to have inflation/employment rate targeting, where the Fed would have open-ended asset buying programs (aka, quantitative easing), which has the bank buying assets to pump money into the economy) until the desired rates were achieved.”
“What is really disturbing about his views — albeit not surprising, I’m sorry to say — is that, once again, we see that no lessons have been learned,” he added. “The Fed is the epicenter of the financial disaster and ruined lives that have become the America of the past decade or so, and yet no one there can see it.”
Although Fleckenstein did not specifically discuss the gold market – as he frequently does – looking ahead, the noted investment manager acknowledged that “Though it pains me, and I know it is perverse, I continue to advocate that the Fed just hurry up and do what it’s going to do so the bond and currency markets can revolt and the country will hopefully be forced to pursue sane policies. The reason I am willing to do that is because I know they are going to be irresponsible, and I know that will lead to more trouble, but it will be the kind of trouble we actually need. Only by pursuing these policies to their absurd conclusions can we put an end to them.”