Economists: Are we headed for civil war?
Not exactly, but Stephen Gandel, writing for TIME鈥檚 Curious Capitalist blog, certainly entertains the notion of a Fed-instigated civil war. He remarks that the upcoming November 2nd Federal Reserve meeting could 鈥渕aybe鈥� be the most important in its history.
At issue is round two of quantitative easing, Bernanke鈥檚 Treasury bonds buying mission 鈥� which is in many ways equivalent to simply printing money 鈥� the uproar it could inspire in the public, and the possibility that it could leading to a taking up of arms.
From TIME鈥檚 Curious Capitalist:
鈥淎 number of people both inside the Fed and out believe this is the wrong move. But one website seems to believe that Ben鈥檚 plan might actually lead to armed conflict. Last week, the blog, , paraphrasing a top economic forecaster David Rosenberg, that it believed the Fed鈥檚 plan is not only moronic, but 鈥榩ositions US society one step closer to civil war if not worse.鈥�
鈥淚鈥檓 not sure what 鈥榠f not worse,鈥� is supposed to mean. But, with the Tea Party gaining followers, the idea of civil war over economic issues doesn鈥檛 seem that far-fetched these days. And Ron Paul definitely thinks the Fed should be ended. In TIME鈥檚 recent cover story on the militia movement many said these groups are powder kegs looking for a catalyst. So why not a Fed policy committee meeting. Still, I鈥檓 not convinced we are headed for Fedamageddon. That being said, the Fed鈥檚 early November meeting is an important one. Here鈥檚 why鈥�
鈥溾�early two years after the Fed cut short-term interest rates to basically zero, more and more economists are questioning whether the US central bank is making the right moves. The economy is still very weak and unemployment seems stubbornly stuck near 10%.鈥�
It seems imaginative to consider the people who are militia-minded in the US as being the same people who would pay close attention to Fed meeting minutes, in particular, and then take to the streets in violence. That said, a continued deterioration in the economy, coupled with increasing joblessness, has been the source of many a prediction of civil unrest: from Barry Ritholtz suggesting investors get long to Dr. Ron Paul warning of .
With that longer-term perspective, it鈥檚 certainly plausible that any inflationary consequences Fed actions may bring about, could, in turn, ignite an outcry of some magnitude. For more details, you can read TIME鈥檚 Curious Capitalist post on .
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