stimulus

A new stimulus program may be adopted by the United States, Federal Reserve Chairman Ben Bernanke told Congress Wednesday. Bernanke noted that additional asset purchase plan is in the works.

The head of the central bank said that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.

Federal Reserve chairman Ben Bernanke said this week that a recent spike of inflation is driven mainly by rising commodity prices across the globe and it is unlikely stay persistent.

These comments are in sharp contrast to other US central bank officials who believe the time is coming for the Fed to begin tightening monetary policy.

Earlier Atlanta Fed President Dennis Lockhart also said that inflation would probably remain moderate.

Warren Buffet expressed an optimistic view of the US economic prospects and said that despite his "enormous respect" for the efforts of Federal Reserve Chairman Ben Bernanke to move the economy forward, more stimulus is not the answer now.

"In the end, I don't think we need more of that," Buffett said in an interview on CNBC television.

Meantime, he believes that with the improvement in the business world a decline in the unemployment rate should also come to the low 7 percent range by the November 2012 elections from 9 percent now.

On Tuesday the gold bullion remained steady as investors were waiting for more monetary easing by the Federal Reserve, and physical buyers were on the sidelines awaiting a clear direction on prices.

After the Group of 20 meeting produced little firm policy initiatives, investors resumed selling off the dollar, which resulted in the greenback sinking to a 15-year low against the yen on Monday. The dollar was steady on Tuesday.

On Thursday world leaders expressed their common wish to secure the economic recovery but they didn’t come to any unanimous conclusion disagreeing on how to best reach the global stability. Officials who came for the Toronto G20 summit tried to downplay differences between the United States and Europe over how quickly to shift from crisis-fighting mode to budgetary belt-tightening.

"That's the delicate balance that we need to try to strike this weekend," Canadian Finance Minister Jim Flaherty said.

The global economic growth remains vulnerable to sovereign debt risks and a second downturn, warned Chinese Premier Minister Wen Jiabao on Monday and underlined that his own country remain on track.

Wen said that it is still early for the nations to consider exiting their stimulus spending.

"All countries must coordinate together and strengthen support to the economy. There cannot be the least relaxation," he told a meeting with Japanese business leaders in Tokyo.

 The Organization for Economic Cooperation and Development reported that in light of the "substantial improvements" in financial markets economic recovery in the developed nations will be faster next year.

Driven by the stimulus measures and reduced interest rates the recovery will still remain modest next year with the U.S. and Japan outpacing Europe, the OECD report said.

 EU Competition Commissioner Neelie Kroes stated on Thursday that the Royal Bank of Scotland became risky well before the crisis burst out as it grew so bid that it was "simply too big to operate and supervise."

Kroes said banks' ballooning balance sheets should have set off investor's alarm bells and that she was now trying to "build up solid banks by working with them to face certain realities."

 Largest US banks Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. reported they will stop providing insurance of checking accounts in the U.S. above the standard $250,000 limit. The banks are exiting the Federal Deposit Insurance Corp.’s Transaction Account Guarantee Program on Dec. 31, spokesmen for the three companies said to Bloomberg.

The program was launched in October 2008 by the government as an emergency measure to shore up confidence in the banking system and avert a collapse of financial markets.

 In the transcripts of a speech to be carried at the Israeli Presidential Conference European Central Bank Governing Council member Axel Weber stated that the euro zone will unlikely experience the second recession after exiting it. He noted that there are no risks of price instability in the policy-relevant medium-term horizon.

 Nicu Harajchi, CEO of N1 Asset Management, told on Friday that the current global recession will likely take the form of a Nicu Harajchi, CEO of N1 Asset Management,” noting that stimulus hasn’t done any good to ordinary people. He said that it is Wall Street who makes money but not consumers.

"We have seen the G20 coming out with cross border capital injections of $5 trillion this year… But a lot of this money hasn't really come down to Main Street," he said.

 Appearing at a Fed conference on Thursday the US Federal Reserve Chairman Ben Bernanke warned that while the government will be further supporting the national economy it can last forever as it implicates risks of inflation. He made it clear that policymakers are currently thinking over the plan how to quit from stimulating the US economy as it becomes stable.

"Accommodative policies will likely be warranted for an extended period," Bernanke told participants at the conference held in the Fed's headquarters.

 The International Monetary Fund said Thursday that the global economy is recovering faster than expected - but warned governments against premature withdrawal of stimulus efforts.

The positive report card was likely to feed a cautious but widespread relief that - despite continuing unemployment woes and halting efforts to improve regulation of financial markets - the downturn is easing and may prove less devastating than initially feared.

 On Wednesday the Federal Reserve reported its new assessment of the economy state saying the growth is back again after the recession. Meantime the central bank said that it would still keep interest rates very low for a long time.

Besides, the Fed also stated that it plans to slow its purchases of mortgage debt to extend that program's life until the end of March as it wants to contract its extraordinary support for the economy and markets during the recession.