Yellen says the Fed is not “ actively considering” any of the radical and destructive ideas she outlines in her speech, but if not why is she mentioning them? These ideas include: printing money to buy assets including stocks, targeting 4% or higher inflation, printing money until nominal GDP hits a certain target (Fed speak for until we get as much inflation as we want).
Also note that when ’08 hit, the Fed bought government supported mortgage securities even though that was illegal at the time. They got a law passed later saying it was OK but that didn’t stop them from breaking the law blatantly at the time.
The Fed has long been playing with fire. Now Yellen is considering…er…not considering…adding some kerosene.
(From The Washington Examiner)
In an address prepared for an appearance at an annual conference in Jackson Hole, Wyo., Yellen said that the Fed “may wish to explore the possibility of purchasing a broader range of assets” than it currently does. Although she didn’t specifically say so, such assets could include stocks rather than the government bonds the Fed currently is limited to.