Federal Reserve chairman Ben Bernanke hinted, in a letter to House Oversight Committee chairman Darell Issa (R-Calif.), that more "quantitative easing," that is, money printing, is on the way. The expectation in the media and among the tea leaf readers is that Bernanke will make it official when he addresses the Fed's annual gathering at Jackson Hole, Wyoming at the end of August.
In his Aug. 24 letter to Issa, first reported by the Wall Street Journal, and then The Hill, Bernanke said the Fed's efforts have "substantially helped" the U.S. economy, adding that he will not hesitate to do more, if deemed necessary. He said the two rounds of QE "helped promote a stronger recovery than otherwise would have occurred" and helped stave off potential deflation, and that the door must be left open to do it again, if needed, as opposed to be restricted by any Congressional acation.
Bernanke also slammed Ron Paul's audit-the-Fed bill, which has growing support in Congress. He said this would create a "nightmare scenario" with Congress constantly looking over the Fed's shoulder. "The Federal Reserve's independence gives it the latitude which is critically important to purse its statutory mandate without consideration of political factors," he wrote. What he's really saying is that an audit would expose the Fed's hyperinflationary policy for what it is, an effort to save a dead system.