Goldman Sachs (GS) economists defended Federal Reserve Chairman Ben Bernanke's decision to pump billions of dollars into the economy, saying the move will boost economic growth.

The Fed's plan to buy $600 billion of assets will improve growth and reduce the risk of deflation, economist Jan Hatzius wrote in an e-mail to clients, Bloomberg News said.

The governments of China, Germany and Brazil have all criticized the plan, saying it will hurt the global economy.

"The widespread hostility to the Fed's actions is misplaced," Hatzius wrote. "Downside risks to the economic outlook have declined significantly. U.S. inflation is unlikely to become a problem for years."

Bernanke defended his policies and dismissed the notion that the purchases will stoke U.S. inflation.

"I have rejected any notion that we are going to raise inflation to a super-normal level in order to have effects on the economy," Bernanke said on Nov. 6.


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allisonisa39e

And when we will have massive inflation then Bernanke will say it was someone elses fault. Of course Goldman Sachs will support The Fed. The bailouts and the stimulus were also backed by the Fed and Goldman Sachs. They have not worked so an answer that any Psychotic would approve of is to keep doing what did not work.

November 10 2010 at 6:34 AM Report abuse rate up rate down Reply
cabo79

BS, when they announced the buy up of ABSs, the Banksters are more than happy to get rid of them especlley at 100 cent on the dollar, Gas went up 15 cents a gallon, all other commodities went up 10% to 15%, If your government wanted to do anything but give the BanBS, when they announced the buy up of ABSs, the Banksters are more than happy to get rid of them especilley at 100 cent on the dollar, Gas went up 15 cents a gallon, all other commodities went up 10% to 15%, If your government wanted to do anything but give the Banksters more money they would let the SBA make direct loans to small bussiness like Farm Credit does for farmers. But the Banksters won't let your government do that because they may lose some business in the future.

November 08 2010 at 12:50 PM Report abuse rate up rate down Reply
hiddenlevers

Should I be worried about inflation or deflation? It’s so weird right now - it seems deflation is happening in some areas, where inflation is happening in others. So no pundit has got it right. My house is losing value, and my NYC-LA non-stop plane ticket for thanksgiving costs 219 usd. But on the other hand, food is more expensive these days, especially produce, and so is gas. And i'm definitely worried about the dollar. I started a site called HiddenLevers. We have some scenario based analysis, and economic charting tools that are easy to use. I'm trying to make it better all the time. Hope you can help. Check out this visual on what the economic impact of deflation will look like: http://www.hiddenlevers.com/hl/u?cbSAWT However, if the dollar keeps losing value, you have to look for investments that do better from that economic trend. Some of the staffing companies seem to be good hedges. The ones with the strongest inverse correlation to the US Dollar will fare best for inflation. Here is a comparison: Korn/Ferry Intl (KFY = decent) http://www.hiddenlevers.com/hl/u?bLuw9U TrueBlue Inc (TBI = decent) http://www.hiddenlevers.com/hl/u?9SoVeZ ExlService Holdings Inc (EXLS = decent) http://www.hiddenlevers.com/hl/u?cOAAKa Kelly Services (KELYA = awesome) http://www.hiddenlevers.com/hl/u?bauXEQ 51Job (JOBS = awesome) http://www.hiddenlevers.com/hl/u?djn5IW

November 08 2010 at 12:18 PM Report abuse rate up rate down Reply
shm3418

If wallstreet likes it, DON"T DO IT! Damn snake oil salesmen! GS is part of the reason Ben sold all those securities, to make sure they got there christmas bonuses in time! Time to put wallstreet, BAT, Spider, and all these crazy stock manipulators out of business. Pull the plug on the high speed traders and build a new market that allows trading once a day. restore stability. restore some sanity to gas prices. Put banks on notice that they will NEVER be bailed out again for the sake of there profit margins and ceo pay! Better yet, fire the feds and bring back a gold standard for currency valuation and stability.......

November 08 2010 at 9:07 AM Report abuse +1 rate up rate down Reply
marine1942

Of course they support the inflation move--guess who will win ? Goldman Thanks Ben and Obama ( where is Obama? ).

November 08 2010 at 8:13 AM Report abuse +3 rate up rate down Reply