strong proponent came out of the new york fed and had the views of the new york fed which was always in favor of fixed exchange rates. so what i would like to read is that, you know, he was the undersecretary who when events forced you to float the dollar, floated the dollar. and what made the transformation, just the facts? or did he come to the conclusion which is quite relevant now when we think about the e.u. that the very interest international economists like ken rogoff say fixed exchange rate systems don't last more than eight or ten years at the best? be and the reason is because, of course, we're not willing to do the things which put the exchange rate stability above unemployment. and was -- so i'd like to ask in the secret diary whether he believes that a fixed exchange rate system would be the best system for the world and how he would go about getting that or whether he thinks that we're going to have to be in a floating rate world, whether that's the best of all possible worlds or not. >> well, let me make two comments about that. the immediate question of fixed exchang

>> the dodd-frank legislation with the fed cooperation and a lot of other fed is initiatives has basically created a completely transparent fed as far as financial concern. people say all that the fed, with the neeis open the books. what is the transactions. currently, every program that we initiated during the crisis has been completely open to the gao. all the information has been provided to the public. december 1st we put out a record of all 21,000 loans that we made during the crisis. all 21,000 which by the way were paid back with interest explain what the program was and what the criteria, the bar were, the collateral, when was it repaid, we provide a weekly statements of our balance sheet, we have an outside auditor which comes in and audits the books and publishes all the information every year. so every aspect of the fed financial dealings are wide open and wehave invited the gao to come in and ook at all of our activities come extraordinary activities during the crisis, and all f our ongoing activity. so there is no sense in which the fed has a secret financial dealings. all of

for you and in the case of the fed it didn't really have to change that much the fed just said ok fine we're going to waive our five day anti-trust check it out period which we obviously did with j.p. morgan and bear stearns we're going to just keep on doing whatever we can to help you and we'll just call you bank holding companies now and as a result you'll be able to access our money our of our capital from us at very cheap levels you'll be able to use the fact that the federal reserve back in you means that you can also now go out into the market when the market's better and get investors to give you money again because the fed is backing you and all of these things that are beneficial to a bank holding company because the fed and the government back you even though goldman and morgan stanley were not actually acting like the classic what should be considered a bank holding company which is a bank that holds the posits and loans for people one last question the federal reserve bank recently has said that we're going to change the way we do accounting so all this garbage on our balan

is backing you and all of these things that are beneficial to a bank holding company because the fed and the government back you even though goldman and morgan stanley were not actually acting like the classic what should be considered a bank holding company which is a bank that holds the posits and loans. for people one last question the federal reserve bank recently has said that we're going to change the way we do accounting so all this garbage on our balance sheet we're never going to have to pay for it we're just going to be out we're going to keep it for infinite period of time because we've totally changed the way the whole concept of accounting works if you saw the story can you comment on that story well it's very much what the fed allowed to happen to the financial industry after the bell which is basically to change all their rules so they would have to value securities at market levels because there was no market the fed knows and has known that the stuff it has on its balance sheet has no value or has very limited value actually i continue to say it has no value but it h

got to the fed and said you know what we need capital that might end up in the exact conversation but that's why banks go to the fed when they are in dire straits because they need capital but the problem was goldman sachs marcella were not classified as bank holding companies so technically this was a situation again where you push the law but then the law changes for you and in the case of the fed it didn't really have to change that much the fed just said ok fine we're going to waive our five day anti-trust check it out period which we obviously did with j.p. morgan and bear stearns we're going to just keep on doing whatever we can to help you and we'll just call you bank holding companies now and as a result you'll be able to access our money our of our capital from us at a very cheap levels you'll be able to use the fact that the federal reserve back in you means that you can also now go out into the market when the markets better and get investors to give you money again because the fed is backing you and all of these things that are beneficial to a bank holding company because

from the top, ryan said he doubted the short-term boost from the fed's bond buying program, known as quantitative easing, will outweigh the long- term pain. >> you're going to see inflation after it's already been launched and given that you have a huge balance sheet and given that we are in uncharted territory... that we're going to catch this after it is too late. >> reporter: fed chairman repeated his strong commitment to keep prices stable. and he said, for now, markets believe that. he said investors are signaling through bond purchases that they expect inflation of about 2% over next five years. >> so there is not any indication in our financial markets that in the united states there is an expectation of inflation. >> reporter: another concern raised by republicans is that the federal reserve will eventually monetize the debt. that's what economists call it when a central bank prints money to pay off government borrowing. the end result is to flood the economy with paper money, driving up inflation and undermining savings. that's the fear, but bernanke says it will not happen.

that is what the fed is doing. they're moving the country from a long-term tax rate mortgage poor short-term floating rate mortgage at a time when we are already a little bit shaky. >> with regards to this, if any of you would like to comment, i think it is a matter out there in the public and within the financial markets, mr. hickey says to thousands easy money led to growth imbalances and 1% interest led to a housing bubble in the mid 2000's and then the credit crisis and now the rates are zero. the fed needs to put more money. things are all right right now. but in june, the $2 million they are printing per month, it may not look so rosy. the economy has structural problems and we're not dealing with them. monti-printing will not work. that is the prescription -- money printing will not work. yet that is the prescription we keep giving the patient. there will be more imbalances' until the sense and, at some point, it will end because the dollar will fall apart and what we are now wondering makes everything appea

. >> as this report tonight shows, the fed chairman spent much of today's qan, session talking about the long list of challenges facing the economy. >> reporter: in a rare appearance before journalists at the national press club, the federal reserve chairman defended his government bond- buying program known as quantitative easing. bernanke said the unorthodox policy is working to boost the economy, even though unemployment and inflation both remain too low for comfort. the fed chairman also pushed back against critics who say the central bank is partly responsible for record-setting food prices around the world. those critics say the fed's low interest rate, easy money policies are weakening the dollar, which exports inflation. but bernanke said fast growth in emerging markets is causing prices to rise, and if those countries don't like that, they can adjust their economic policies and exchange rates. he dismissed any suggestions the fed is at all responsible for the economic stress contributing to the unrest roiling the middle east. >> food in egypt is priced in egyptian pounds, no

so the starving people are not fed because of the fed right to say it is causing people not to be fed. well we've always talked about how inflation. it helps the rich because of course they own the assets into which a lot of the money goes but also they get money for zero percent from the fed and then are able to speculate on all sorts of products quickly think of it as a river e-mail the river flows down so that the fed creates a flow of cash and the people toward live near the fed like on wall street that they get the fresh water the clean water need to live downstream you get the dirty water and that's the what happens in the global financial markets and it increases the price of agricultural products food and we see that related to these headlines these coming out these just these charts actually to show you what the difference between the revolutions happening in the middle east and why no revolution is yet happened in asia so if you take a look at this wheat chart you'll see it's rocketing and then take a look at the rice chart you'll see that that's not gone up nearly as much s

ferals headline fed dictator ben nankeen needs to be toppled. so he says that the fed boss ben bernanke he is the most dangerous human on earth far more dangerous than hosley mubarak egypt's thirty year dictator ever was bernanke he rules a monetary dictatorship that will trigger the coming third meltdown of the twenty first century right you know a year ago or so paul be feral over there mark and watched jones might have been accused of sedition but because the global insurrection against banker occupation is gathering storm gathering force all over the world the forces that are in power now can't stop at the momentum is too high so we're seeing in egypt are saying to me we're seeing riots all over the world in america it's coming it's coming soon and it's time for a regime change and he's right to target the federal reserve bank because obama let's face it obama is just a sideshow the real power is ben bernanke in the federal reserve bank that's where the regime change needs to take place and ben bernanke is the figurehead for a collection of

that is what the fed is doing. they are moving the country from a long-term fixed-rate mortgage to a short-term floating mortgage at a time where we are already shaky. >> i think the public into the financial markets -- 2000 easy money lead to global imbalances. it led to a house in bubble, then the credit crisis. to get a response from the economy, the fed must spend more money. it did, and everything looks great right now. but things may not look so rosy in a couple of months. the economy has structural problems and we are not dealing with them. if the fed keeps printing else, we will have higher gasoline in a few -- fuel prices. the dollar will fall apart, but it is devastatingly terrible policy in the long run. i think there is that perception by a lot of people out there. let me ask you to respond to that. >> the fed could have a looser monetary policy if congress would have a tighter fiscal policy and spend less and have looser monetary policy. we are breaking that will. this is not the right mix -- makes. >>

and a whole lot of folks have got to get fed. but seven seats were made in under seven days, the first man was forgiven when he missed the hague, the branch was taken by a dove to a book that was built before a flood, if a rainbow sent out a sign, if someone was told to sacrifice his own son and told to hold up before he was done, then the fish and bread that i just said is all that i've got, is all that i need for me to get fed and for me to feed a whole lot of folks in need because they set me on fire. when they look back, i was chilling. i had to fight like 10 older brothers, and because i had this dream, so they sold me out to a band of bandits and one day was commanded to stop, drop, when i got this fish that i found while fishing around, under water with the daughter of the pharaoh, the child was chosen to force the pharaoh to free his folks from a foreign land, repair everywoman, prepare every man, prepare every child, all you've got is that right in your hand. all i've got is some fish and a few loaves of bread, and a who

but first maria sharapova will make her home fed cup debut tomorrow as she was picked to play in the singles for russia's tie with france the world number thirteen takes on really matters are no wild in the other match but lawmakers next over goes up against at least corn a richard paul fleet has more. it's taken some time but finally maria sharapova will make her long awaited home debut for russia and the twenty three year old has been hampered by shoulder injuries over the last couple of years a take on the genie resign oh the two players will know each other very well having met in the second round of last month's australian open up about one in straight saints meanwhile the wall number thirteen is just happy to finally play for a country again it's such a difference to live everything you know we're used to playing an individual sport and you know and this gives us an opportunity to play as a team and you know to really support our country even though we support on a daily basis we really get together as a team and you know support each other go out there and try to beat the othe

of minutes released today from the fed's january policy meeting. but there were no significant changes to the fed's forecast on jobs or on inflation. >> tom: nevertheless, the government's measure of wholesale inflation rose in january. the so-called producer price index jumped 0.8%. that's the seventh straight monthly increase. so do we have an inflation problem? suzanne pratt reports. >> reporter: ask most wall street economists if the u.s. has an inflation problem and the answer is pretty much no. ask that same question of americans filling up their gas tanks or buying groceries and you get a much different take. >> like cereals, for instance. it's a joke. i used to buy cereal. it's just, everything it going through the roof. >> the prices are ridiculous. i mean like orange juice, milk. >> reporter: the disconnect between main street and wall street is simple. consumers pay most attention to the cost of everyday items. economists follow data that tracks a large basket of goods at both the retail and wholesale level. as it turns out, wholesale pr

how does the fed intend to train $1 trillion in excess reserves? >> well, first, we can raise interest rates without draining reserves. as i mention, raising the interest rate to banks, but we have at least three other tools. >> if i can pause there, how much would you have to increase? >> we want to raise the -- say we wanted to raise the short term interest rate to 1%, then if we paid 1% on excess reserves to banks, they would not be willing to lend money to the money market at less than 1%, and that achieves our octoberive right -- objective right there. there are other tools including time deposits, reverse repos, asset sales, and perhaps others. >> as you do that, what's the impact on the economy? >> it will be a tightening of monetary policy. again, interest rates go up. that slows the economy, but that is what monetary policy, that's what taking away the punch bowl always does, the accommodation is no longer needed, the economy can move forward on its own. the point is to normalize financial conditions so that you can get back to a healthy g

the fed has basically enabled this entire rally, in my opinion. certainly if you look back at history, the last 10 years or, so the market has really gone nowhere but the fed entempted to enable it in early 2000, and we had a rally and then we look at the crash from 2007-2009. it never really worked out. from that perspective, i don't think of it in terms of the longer term view that that's going to work out very well. >> tom: your thought is when it comes to the end of the bond-buying binge that will be first exit strategy we've seen from the fed in the post-recession period and that's what makes you worry. >> that's right. and it stops the end of june. and we'll see how that goes. i don't think that coupled with what congress is doing, those two things, are going to cause the market to move lower over the course of the next few years. >> tom: meantime we're in the midst of a pretty nice bull run. the s&p 500 up 6%. >> it's gone much father, much greater than i thought, but this constant enabling that's going on, once i think that stops, the part