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Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank’s record stimulus risks a surge in inflation and may impair efforts by households to repair their finances.
“Attempts to increase economic ‘stimulus’ may not help speed up the process and may actually prolong it,” Plosser said in the text of a speech today in Somerset, New Jersey.
Jan. 11 (Bloomberg) — Federal Reserve Bank of Philadelphia President Charles Plosser talks about Fed transparency and monetary policy, the federal debt and the outlook for economic growth. He speaks with Michael McKee in Somerset, New Jersey, on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)
Policy makers are discussing how long they will keep buying mortgage bonds and Treasuries as part of efforts to boost growth and bring down a 7.8 percent unemployment rate. The Fed last month linked its interest-rate outlook to economic thresholds, saying borrowing costs will stay low “at least as long” as joblessness exceeds 6.5 percent and if projected inflation won’t go beyond 2.5 percent one or two years in the future.
“Efforts to drive real rates more negative or promises to keep rates low for a long time may have frustrated households’ efforts to rebuild their balance sheets without stimulating aggregate demand or consumption,” said Plosser, who doesn’t vote on monetary policy this year. He has repeatedly criticized Fed easing for risking higher inflation and jeopardizing the central bank’s credibility, and said the latest stimulus steps do little to boost growth.
Low interest rates reduce returns for savers and do little to encourage businesses to expand payrolls or invest in new ventures, Plosser said.
“Monetary policy accommodation that lowers interest rates is unlikely to stimulate firms to hire and invest until a significant amount of the uncertainty has been resolved,” he said. “Firms have the resources to invest and hire, but they are uncertain as to how to put those resources to their highest valued use.”
An increase in the benchmark interest rate is “conceivable” in 2014, Plosser said to reporters after the speech. Such a move would be a year earlier than the 2015 date Fed officials had announced before switching to thresholds for unemployment and inflation.
The move away from dates is a “step forward” in Fed communications, though may invite “a fixation” on specific unemployment and inflation reports rather than a broader view of economic data, Plosser said. The Fed shouldn’t change the numerical thresholds, a change that would be “terribly confusing,” he said.
The Fed is looking for evidence of distortions in financial markets that may stem from a lengthy period of low interest rates and asset purchases, the Philadelphia Fed chief said. Businesses need to be alert to accumulating too much risk from a potential rise in interest rates over time, he said.
Plosser also said he is encouraged by signs U.S manufacturing may pick up after a period of sluggish growth.
In response to audience questions, Plosser said he favored halting additional bond purchases because their benefits are “pretty meager” and “there are lots of risks” including disruptions in the economy.
“The more of these assets we have, the more complicated the exit strategy will be,” he said.
The Fed may need to slow or halt bond buying this year as the economy makes “modest progress,” Plosser said in a Bloomberg Television interview.
“Given where we are, I think I would not be surprised if we face the choice of having to rein in the purchases sometime during this year,” Plosser said in the broadcast interview.
U.S. stocks fell, after the Standard & Poor’s 500 Index advanced to a five-year high. The S&P 500 fell 0.1 percent to 1,470.99 at 11:57 a.m. New York time.
Plosser reiterated his view that unemployment will drop to near 7 percent by year’s end and the U.S. growth rate will pick up this year to about 3 percent, which he said was “at the high end” among Fed policy makers.
The U.S. economy may expand at a 2 percent pace in 2013 after a 2.3 percent gain last year, according to the median forecast among economists surveyed by Bloomberg News this month.
“Inflation expectations will be relatively stable and inflation will remain at moderate levels in the near term,” Plosser said. “However, with the very accommodative stance of monetary policy in place for more than four years now, we must guard against the medium- and longer-term risks of inflation.”
Inflation as measured by the personal consumption expenditures price index rose 1.4 percent in November from a year earlier. The Fed aims for price acceleration of 2 percent. Story Continued:
In an interview with YourBlackWorld.net, Nation of Islam leader Louis Farrakhan interpreted the movie Django Unchained as “preparation for a race war.”
“To me, the movie had a purpose,” he said. “If a black man came out of that movie thinking like Django and white people came out of that movie seeing the slaughter of white people and they are armed to the teeth, it’s preparation for a race war. Story Continued and to watch video:
A group of like-minded patriots, bound together by pride in American exceptionalism, plan on building an armed community to protect their liberty.
The group, named Citadel, intends to purchase 2,000 to 3,000 acres for the project in western Idaho. The community will comprise of 3,500 to 7,000 families of patriotic Americans who “voluntarily choose to live together in accordance with Thomas Jefferson’s ideal of Rightful Liberty.”
According to the Citadel website, Rightful Liberty means that “neighbors keep their noses out of other neighbors’ business, that neighbors live and let live.”
Citadel explains that residents in the community will be bound by the following:
Pride in American Exceptionalism
Our proud history of Liberty as defined by our Founding Fathers, and
Physical preparedness to survive and prevail in the face of natural catastrophes –such as Hurricanes Sandy or Katrina — or man-made catastrophes such as a power grid failure or economic collapse.
Residents should also agree that being “prepared for the emergencies of life and being proficient with the American icon of Liberty — the Rifle — are prudent measures.”
Some of the benefits of the Citadel community include a safe, well-prepared, patriotic community where children will be educated in school, not indoctrinated.
The community will be protected by a perimeter wall that will be inaccessible to “tourists.” Each neighborhood within the community will have lower walls, dividing the town into defensible sections.
The website has a link to applications where prospective residents can sign up. According to Citadel, more than 200 families have completed applications, even before any land has been purchased.
While Citadel may sound wonderful to many who are reading this, the community has posted a warning on their home page:
“Marxists, Socialists, Liberals and Establishment Republicans will likely find that life in our community is incompatible with their existing ideology and preferred lifestyles.”
Citadel says that every patriot selected to live within the community “will voluntarily agree to follow the footsteps of our Founding Fathers by swearing to one another our lives, our fortunes and our Sacred Honor to defend one another and Liberty against all enemies, foreign and domestic.” Story Continued:
· Skeptical-sounding federal judges on Thursday considered whether the public can see pictures of terror mastermind Osama bin Laden, taken after he had been shot dead by U.S. Navy SEALs in a raid on his hideout two years ago.
The 52 pictures, some described as “graphic” and “gruesome” by a top CIA official, highlight a Freedom of Information Act fight that climaxes just as Hollywood’s version of bin Laden’s death hits movie theaters. But while Hollywood’s depiction has attracted both critical acclaim and political heat, and was accomplished with the CIA’s help, the real world pictures snapped by elite commandos seem destined to remain secret.
“They’re telling us it’s a risk . . . that Americans will die if we release these documents,” Judge Merrick Garland said Thursday, adding that “when the government tells us this is likely to lead to death, shouldn’t we defer to that (even) more than when they say it will result in the release of secret information?”
Judge Judith Rogers, who like Garland was appointed by a Democratic president, further cited “the concern that these images could be used as propaganda.” Echoing arguments made by Obama administration officials, Rogers suggested that the propaganda concern is aggravated by the late bin Laden’s prominence as al Qaida’s leader
“Almost anything associated with him is necessarily of concern,” Rogers said.
The explicit fears raised by two members of a three-judge appellate panel during oral argument provided a strong indication, though no guarantee, that the court will side with the Obama administration in keeping the bin Laden photos secret.
Rejecting the Freedom of Information Act bid from a legal advocacy group called Judicial Watch would add to the cloak already draped around other politically sensitive U.S. military and spy actions since the 9/11 terrorist attacks.
The Pentagon long sought to keep secret certain incendiary photos of U.S. soldiers abusing prisoners at the notorious Abu Ghraib prison in Iraq. An estimated 2,000 other prisoner abuse photos taken in Iraq and Afghanistan also have been withheld by the Obama administration. A former top CIA officer ordered the destruction of videotapes showing captured al Qaida leader Abu Zubaydah being interrogated under the simulated drowning technique known as waterboarding.
The photos currently in question – which, theoretically, could include videotapes as well – depict a dead bin Laden at four distinct moments during and after the May 2, 2011, raid. Some pictures show him shortly after he was shot at close range by a member or members of the secret direct action unit known as SEAL Team Six.
“They depict the fatal bullet wound to (bin Laden’s) head and other similarly gruesome images of his corpse,” John Bennett, director of the CIA’s National Clandestine Service, stated in a 22-page declaration filed in 2011.
Other pictures or video show bin Laden’s corpse as the commando team flew by helicopter away from his compound in Abbottabad, Pakistan. Some show bin Laden’s body being washed and tended by U.S. personnel, and some show his post-midnight burial in the North Arabian Sea by the crew of the USS Carl Vinson.
“The government fails to appreciate that these are various types of images,” Judicial Watch attorney Michael Bekesha stated Thursday, noting that some of the photos being sought show what the government itself refers to as a “dignified” burial service.
Bekesha argued, in part, that the Obama administration failed to individually specify how each of the 52 photographs or videotapes pertains to the kind of weapon system, intelligence operation or foreign relations activity that can properly be withheld under the Freedom of Information Act. Justice Department attorneys countered that officials provided sufficient specific detail and that, in any event, other priorities trump the public’s right of access to government information.
“Release of these materials could reasonably be expected to harm national security,” Justice Department attorney Robert Loeb argued Thursday.
As it happened, the 45-minute oral argument Thursday occurred only about one block away from the Washington museum where the Oscar-nominated Hollywood version of the bin Ladin raid, “Zero Dark Thirty,” received its D.C. premiere Tuesday night. Democratic Sen. Dianne Feinstein, chairwoman of the Senate Intelligence Committee, has formally asked the CIA for all information provided to the filmmakers by agency officials.
The help provided by the CIA included detailed information about the floor plan of bin Laden’s compound, as well as meeting with the moviemakers, documents obtained by Judicial Watch under a separate FOIA request show.
“I can’t tell you how excited we all are . . . about the project,” the CIA’s then-public affairs director George Little wrote the screenwriter in a November 2011 e-mail. “It’s been a real pleasure to help facilitate things.” Story Continued:
HOUSTON — A couple of strangers came to the rescue when a man was robbed at gunpoint. Now, the victim wants to say thank you to the Good Samaritans.
Police believe the criminal who was canvassing a neighborhood in the 2500 block of Wichita near Hermann Park had no idea what he was in for when he picked his target.
The victim in this case had just walked back to his car from a bar around the corner.
Kevin Dorsey says he hadn’t even closed his car door Thursday night when a man wearing all black and a ski mask put a gun to his chest. The man took Dorsey’s wallet, cell phone and car keys.
After he was robbed, Dorsey began running down the street and says two men in a Mercedes asked him what had happened.
Dorsey told them and they not only caught up with the suspect, but they started shooting at him.
The suspect fired back. In the end, the two witnesses turned vigilantes won and took down the bad guy.
“I don’t believe in guns,” said Dorsey. “I don’t own a gun. I’m totally at the mercy of my saviors. They obviously sent two angels to help me. These people protected me when I couldn’t protect myself.”
After the robber had been shot, police say he jumped over a fence and was attacked by a German Shepherd. That attack prevented him from getting away.
The suspect, identified as Christopher Hutchins, is being treated at Ben Taub Hospital. He’s expected to recover. Story Continued and to watch the video:
President Obama plans to push Congress to move quickly in the coming months on an ambitious overhaul of the immigration system that would include a path to citizenship for most of the 11 million illegal immigrants in the country, senior administration officials and lawmakers said last week.
Mr. Obama and Senate Democrats will propose the changes in one comprehensive bill, the officials said, resisting efforts by some Republicans to break the overhaul into smaller pieces — separately addressing young illegal immigrants, migrant farmworkers or highly skilled foreigners — which might be easier for reluctant members of their party to accept.
The president and Democrats will also oppose measures that do not allow immigrants who gain legal status to become American citizens one day, the officials said.
Even while Mr. Obama has been focused on fiscal negotiations and gun control, overhauling immigration remains a priority for him this year, White House officials said. Top officials there have been quietly working on a broad proposal. Mr. Obama and lawmakers from both parties believe that the early months of his second term offer the best prospects for passing substantial legislation on the issue.
Mr. Obama is expected to lay out his plan in the coming weeks, perhaps in his State of the Union address early next month, administration officials said. The White House will argue that its solution for illegal immigrants is not an amnesty, as many critics insist, because it would include fines, the payment of back taxes and other hurdles for illegal immigrants who would obtain legal status, the officials said.
The president’s plan would also impose nationwide verification of legal status for all newly hired workers; add visas to relieve backlogs and allow highly skilled immigrants to stay; and create some form of guest-worker program to bring in low-wage immigrants in the future.
A bipartisan group of senators has also been meeting to write a comprehensive bill, with the goal of introducing legislation as early as March and holding a vote in the Senate before August. As a sign of the keen interest in starting action on immigration, White House officials and Democratic leaders in the Senate have been negotiating over which of them will first introduce a bill, Senate aides said.
“This is so important now to both parties that neither the fiscal cliff nor guns will get in the way,” said Senator Charles E. Schumer of New York, a Democrat who is a leader of the bipartisan discussions.
A similar attempt at bipartisan legislation early in Mr. Obama’s first term collapsed amid political divisions fueled by surging public wrath over illegal immigration in many states. But both supporters and opponents say conditions are significantly different now.
Memories of the results of the November election are still fresh here. Latinos, the nation’s fastest-growing electorate, turned out in record numbers and cast 71 percent of their ballots for Mr. Obama. Many Latinos said they were put off by Republicans’ harsh language and policies against illegal immigrants.
After the election, a host of Republicans, starting with Speaker John A. Boehner, said it was time for the party to find a more positive, practical approach to immigration. Many party leaders say electoral demographics are compelling them to move beyond policies based only on tough enforcement.
Supporters of comprehensive changes say that the elections were nothing less than a mandate in their favor, and that they are still optimistic that Mr. Obama is prepared to lead the fight.
“Republicans must demonstrate a reasoned approach to start to rebuild their relationship with Latino voters,” said Clarissa Martinez de Castro, the director of immigration policy at the National Council of La Raza, a Latino organization. “Democrats must demonstrate they can deliver on a promise.”
Since the election, Mr. Obama has repeatedly pledged to act on immigration this year. In his weekly radio address on Saturday, he again referred to the urgency of fixing the immigration system, saying it was one of the “difficult missions” the country must take on.
Parallel to the White House effort, Mr. Schumer and Senator Lindsey Graham of South Carolina, a Republican, have been meeting with a group of at least four other colleagues to write a bill. Republicans who have participated include John McCain of Arizona, who has supported comprehensive legislation in the past; Jeff Flake, also of Arizona, who is newly elected to the Senate; and Mike Lee of Utah. Senator Marco Rubio of Florida participated in one meeting last month.
Democrats in the meetings include Richard J. Durbin of Illinois, the No. 2 Senate Democrat; Robert Menendez of New Jersey and Michael Bennet of Colorado. Story Continued: