Bernanke: Fed wrestles with size of aid program

"Whatever it takes" rather than the illusion of “wrestling” as a description of the size of the aid program would be a better representation of the actions in the coming months and years. The game of controlled devaluation, based largely on the management of perception rather than reality, demands the more subtle headline. The Fed also suggests that jawboning or communication (backed by the printing press) could be used a tool manage perceptions. When communication is completely divorced from action, it’s half-life of effectiveness deteriorates quickly.

Federal Reserve Chairman Ben Bernanke says the central bank is prepared to take steps to rejuvenate the economy through the purchase of Treasury bonds but is wrestling with how big the program should be.

Bernanke also says the Fed could use its communications powers to prevent the United States from slipping into a deflationary spiral.

But Bernanke says the Fed must proceed cautiously in deciding how big a program to buy Treasury debt should be. Bernanke said it is a challenge for Fed policymakers to determine the size of the program and how the debt purchases would be paced.

Source: finance.yahoo.com