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article imageSenator warns of hyperinflation

By Andrew Moran     Aug 27, 2009 in Politics
Iowa Republican Senator Chuck Grassley said on Tuesday that if the Federal Reserve does not control its monetary policy then the United States could see 1980s hyperinflation.
"We won't know for a year if he's done a good job so far, because he shoveled money out of an airplane to save banks and the financial system. But shoveling money out of an airplane to solve problems can be inflationary — in this case, hyperinflationary — if he doesn't start mopping up some of the money that's out there," said Senator Chuck Grassley, who is the ranking member of the Senate Finance Committee, according to The Hill's Blog Briefing Room.
He further stated that as a result of government bailouts and spending inflation rates could rival those of the 1980s with 13.5 per cent. The Iowa Senator, speaking on a conference call with Iowa reporters, argued the case that politicians on Capitol Hill will not know for one year if the Federal Reserve Chairman Ben Bernanke was successful or not.
"The Fed has the ability to put money out, it's got the ability to take money back in, and if they don't do that, we will have hyperinflation worse than we had in 1980 and '81. And I hope he demonstrates that ability."
Grassley concluded, "I would suggest that right now, when everybody's nervous about the economy, that you don't change horses in the middle of the stream, and consequently, it would probably be detrimental to not have him reappointed."
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