" I have never been in his position " It's the Common in the letter that written to Fed Reserve

The 23 people who wrote the letter to Federal Reserve chairman, Ben S. Bernanke this week said to halt expansion of monetary stimulus have something in common: I have never been in his position.

The letter, which said in November the Federal Reserve decision to purchase three 600 billion U.S. dollars of treasury bonds will cause a rise in inflation, was signed by former Republican government officials, economists, columnists and even Dan Senor, former spokesman for the U.S. military effort in Iraq. By contrast, many voices in defense of Bernanke have central banks in their resumes, with former Fed Vice Chairman Alan Blinder, a former Bank of England policy makers David Blanchflower and the Bank of Israel Governor Stanley Fischer expressed all support.

The rhetoric of the critics, without risking the experience of the monetary policy of the Fed and the politicization of interfering with its strategy to boost economic recovery is hesitant, said John Lonski, chief economist at Moody's Capital Markets Group in New York. It helped spark a call from Republican lawmakers to strip the central bank of its responsibility for full employment at a time when the unemployment rate has remained at or above 9.4 percent since May 2009.

"It has become too politicized for reasons that escape me," said Lonski. "They are running the risk that the critique of quantitative easing is counterproductive if the financial markets to go to another dive and some say that because of strong criticism. The criticism also has the effect of bringing into play the possibility that the Fed may have to change course. "

Funds "most diverse"

The effort has received support from people with "more diverse backgrounds, as central bankers and business leaders that" in fact the creation of employment, "said Lonski.

The signatories of the letter, published in the New York Times and the Wall Street Journal this week, said he agreed with Bernanke November 4 statement that the Fed "can not solve all economic problems by itself." The group, whose members include Weekly Standard editor William Kristol, and former director of the Congressional Budget Office, Douglas Holtz-Eakin, said "the risk of asset purchases planned currency debasement and inflation."

The fiscal and regulatory policies "should prevail" over monetary easing to stimulate growth, said the letter, also signed by Paul Singer, founder of the hedge fund firm Elliott Management Corp. and a Republican donor who raised funds for presidential candidates George W. Bush and Rudolph Giuliani. Stanford University Professor John Taylor, creator of a monetary formula used by the Federal Reserve, also signed the letter. He was a deputy Treasury secretary under President George W. s Bush.

Bush Chief of Staff

Before founding the magazine Weekly Standard, in 1995, Kristol served as chief of staff to Vice President Dan Quayle for George HW Bush's presidency and led the Republican blueprint for the future. Holtz-Eakin is president of the American Action Forum, and was economic adviser to Obama's 2008 Republican opponent, Arizona Sen. John McCain.

Two signatories, Kevin Hassett and Amity Shlaes. Hassett, director of economic policy studies at the American Enterprise Institute, also was an adviser to Senator McCain during the 2008 election and former Federal Reserve economist. Shlaes, a senior fellow at the Council on Foreign Relations, was formerly a Financial Times columnist and editorial board member of the Wall Street Journal.

"I think the criticism just totally inconsistent," said Mark Gertler, an economics professor at the University of New York, adding that he supports "rational" discussion of Federal Reserve policies.

Create inflation

"The signatories of the letter are on the grounds that, firstly, it will not do much to affect the real economy and on the other hand, it will create a lot of inflation, and you can not have one without the another, "said Gertler, who pioneered research with Bernanke, who showed how the financial crisis may accelerate economic downturns. "It would be comical if it were not serious."

The group's objection was "that the Fed is increasing dramatically in size in a time when there is an emergency in the economy or the financial system to justify the expansion," said David Malpass, one of the signatories and a former Bear chief Stearns economist who ran as a Republican candidate in New York for U.S. Senator this year.

While the signing was "a tremendous amount of experience of monetary policy," did not have anyone that you have decided on the policy because "the Federal Reserve is a relatively closed club," said Malpas. "That's part of the problem. It is rare for people who have voted in favor of the Fed never publicly criticize the Fed."

'Unsafe'

Criticism "makes no sense, does not show a practical understanding of how the economy works or how monetary policy makers make decisions," said Blanchflower, a professor at Dartmouth College in Hanover, New Hampshire, in a Nov. 15 television interview. It is "dangerous to play politics with the economy is fragile."

While tax reforms, expenditure and policy "absolutely" be beneficial, not "going to go through a very long time," said Blanchflower. "So the Fed is the only show in town."

The shares have gone up since Bernanke said Aug. 27 that the Fed would "do everything possible", fueling speculation of further monetary stimulus. 500 of Standard & Poor's stock has returned 13 percent, while the yield on the benchmark 2-year Treasury is down to 0.5 percent from 0.55 percent.

The lack of diversity

Martin Feldstein, a professor at Harvard University in Cambridge, Mass., said he agreed with the sentiment of the lyrics, though he did not sign. Feldstein, who was Chairman of the Board, President Ronald Reagan of Economic Advisers, has a "general policy" against the signing of letters of the group, and the lack of diversity among the signers was concerned, said in an interview Nov. 15 Television.

"I'm a little concerned that people who signed this letter seems that all Republicans," said Feldstein. "I think it would have been better if they had become more bipartisan."

Some Republicans in Congress calling for limiting the responsibilities of the Federal Reserve. Sen. Bob Corker of Tennessee, who serves on the Banking Committee, Representative Paul Ryan of Wisconsin, who will lead the House Budget Committee in January, and Rep. Mike Pence of Indiana, chairman of the House Republican Conference, has said they favor the elimination of the Fed's objective of full employment, the past emphasis on price stability.

Financial Crisis

Hostility toward the Federal Reserve is strong among Republican voters in the aftermath of the financial crisis, with 41 percent believe it should be deleted or changed radically . National October 7 to 10. Fifty-five percent of the followers of the Tea Party, a group of activists who want to curb the power of government, support for revision or elimination, according to the survey.

"There are people from all political persuasions who are very skeptical of the expansion of the Fed's balance sheet," said Malpas. The lack of political diversity among the signatories was a coincidence "that available at the sign as we were putting together. It is incorrect to say that the letter politicized the issue."

The Federal Reserve was founded in 1913. Although Congress sets its mandate, the politicians who determine how to achieve these objectives through monetary policy and allow it to resolve differences of opinion among its seven-member board and 12 Reserve Bank presidents.

President of the Dallas Fed Richard Fisher, who has no vote in the policy-setting Open Market Committee this year, said on 08 November in San Antonio that quantitative easing may be "the wrong medicine." Fed Governor Kevin Warsh of who voted for action, said on 08 November in New York that the purchases of bonds may not help the economy.

Federal bailouts

The Federal Reserve could have done a better job of explaining how the expansion of monetary policy differs from the federal bailouts of financial institutions such as the two actions "are confused," said the president of the St. Louis Fed, James Bullard , November 17.

Foreign officials have also spoken out against the U.S. central bank, the German finance minister, Wolfgang Schaeuble, call the asset purchase program "no idea" and suggesting that is designed to erode the value of the U.S. dollar.

Fischer Bank of Israel has been supportive, saying the criticism is "essentially out of place." The latest round of monetary stimulus is "a measure that is healthy for the global economy," Fischer said in a conference call on Nov. 15 with reporters. "I much prefer" Situation A ", with U.S. growth and a dollar slightly weaker, to the 'Situation B," a lower U.S. growth and a stronger dollar. "

'Radical'

Blinder, a professor at Princeton University in New Jersey, rejected claims that quantitative easing is a "radical change" and said in a November 1916 interview on Television that he is more worried about inflation being too low and not too high.

The consumer price index rose 0.2 percent in October, less than expected by economists, after a 0.1 percent increase the previous month, the Labor Department said on Nov. 17 in Washington. Excluding food and fuel, called core costs rose 0.6 percent from October 2009, the smallest increase in registration.

Bernanke at the Capitol Nov. 17 for a closed session with about 11 members of the Senate Banking Committee to defend the monetary easing. He told the group that the program would create jobs, keeping inflation under control.

The Republicans in Congress also wrote four top Bernanke to express "deep concern" over the purchase of bonds. The letter was signed by Republican Leader John Boehner, of Ohio, Republican Eric Cantor of Virginia, Senate Republican leader Mitch McConnell of Kentucky, and Sen. Whip Jon Kyl of Arizona.

"There is plenty for the new Congress to do what it is, why add to their workload by taking the potential threat of long-term inflation quantitative easing?" Said Lonski. "It does not seem to make much sense to get worked over this particular issue."