Bank CEO proposes Fed to expand balance sheet by $30 TRILLIONSubmitted by tsai3904 on Fri, 02/01/2013 - 14:50
QE Cubed: A Modest Proposal for More Fed Buying. A Lot More
By David Kemper, CEO of Commerce Bancshares
The ongoing depressing news about the American fiscal situation has obscured the startling and very impressive earnings performance recently announced by the Federal Reserve. The Fed, in its usual understated way, just revealed it will be turning over $90 billion in 2012 profits to the U.S. Treasury, a much-needed contribution that will put a sizable dent in our nation’s current $1 trillion federal deficit.
That is why I propose the Federal Open Market Committee’s next move be to take our central bank to a whole new level—a 2013 campaign that I call QE Cubed. Why not expand the Fed balance sheet exponentially, from its current $3 trillion to $33 trillion? Earning an extra 3 percent on another $30 trillion in bonds would allow the Fed to return an additional $900 billion to the Treasury—thus wiping out most of our federal deficit while avoiding actually having to do anything about current government spending.
Not only is the author the CEO of a $3.5 billion publicly traded bank, he was also the past President of the Federal Advisory Council of the Federal Reserve.
By the way, this is on the front page of BusinessWeek.com. Can this really be sarcasm?