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An Open Letter to Ben Bernanke

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An Open Letter to Ben Bernanke

November 15, 2010

To: Chairman Ben Bernanke Federal Reserve Washington, DC

Dear Mr. Chairman:

We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.

We subscribe to your statement in The Washington Post on November 4 that "the Federal Reserve cannot solve all the economy's problems on its own." In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

The Fed's purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.


Cliff Asness AQR Capital

Michael J. Boskin Hoover Institution, Stanford University Former Chairman, President’s Council of Economic Advisors

Richard X. Bove Rochdale Securities

Charles W. Calomiris Columbia University Graduate School of Business

Jim Chanos Kynikos Associates

John F. Cogan Hoover Institution, Stanford University Former Associate Director, U.S. Office of Management and Budget

Niall Ferguson Harvard University Author, The Ascent of Money: A Financial History of the World

Nicole Gelinas Manhattan Institute & e21 Author, After the Fall: Saving Capitalism from Wall Street—and Washington

James Grant Grant's Interest Rate Observer

Kevin A. Hassett American Enterprise Institute Former Senior Economist, Board of Governors of the Federal Reserve

Roger Hertog Hertog Foundation

Gregory Hess Claremont McKenna College

Douglas Holtz-Eakin Former Director, Congressional Budget Office

Seth Klarman Baupost Group

William Kristol Editor, The Weekly Standard

David Malpass GrowPac, Encima Global Former Deputy Assistant Treasury Secretary

Ronald I. McKinnon Stanford University

Joshua RosnerGraham Fisher & Co., Inc.

Dan Senor Council on Foreign Relations Co-Author, Start-Up Nation: The Story of Israel's Economic Miracle

Amity Shlaes Council on Foreign Relations Author, The Forgotten Man: A New History of the Great Depression

Paul E. Singer Elliott Management Corporation

John B. Taylor Hoover Institution, Stanford University Former Undersecretary of Treasury for International Affairs

Peter J. Wallison American Enterprise Institute Former Treasury and White House Counsel

Geoffrey Wood Cass Business School at City University London

(Institutional Affiliations are for Information Only)


See the letter as printed in the Wall Street Journal (PDF)

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