WASHINGTON, Aug. 9, 2011 (GLOBE NEWSWIRE) -- It appears that the Fed is on the edge of more monetary easing, and that at the inner circles of the Fed they are becoming concerned about what remaining arrows they have in their quiver to energize the economy.
However, there are options: a Fed-backed Infrastructure Fund.
Washington, D.C. based money manager Joseph Warren, founder of the Warren Capital Group wealth management firm, proposed an infrastructure fund to the Fed in November. (See Letter to Chairman Bernanke here) Such a Fund could be used for building and improving schools, roads, water systems and the electric grid across America.
"If the Fed is going to create money out of thin air, why not build the value of the country rather than bail out those who made bad decisions and can't pay their debts," Warren says, adding that he understands there may be technical difficulties to be considered.
"Naysayers might point out that this type of Fed funding is completely outside the realm of the Fed. But this is no more outside the intent of the central banking system than bailing out AIG or buying Lehman's Maiden Lane mortgage portfolio," Warren offered in his Nov. 16, 2010 letter to Fed Chairman Ben Bernanke.
"The government is already in the market of helping states and municipalities with their infrastructure needs through the Build America Bond program. Furthermore, this cannot be derailed by an incapable Congress as the Fed can actually create these new dollars and this plan does not add to the deficit."
Warren did receive a response from the Fed, and neither Fed policymakers nor anyone else has come up with a legitimate rebuttal of this concept.
Warren says he's hoping that someone in the administration, Congress, the Fed or any other able entity will at least consider an infrastructure option.
A creation of an Infrastructure Fund by the Fed could pump real jobs into the economy, Warren says.
This idea is timely given the Fed meeting today.
"After the events that have transpired in Washington of recent, I am truly concerned that very few policy makers have quality ideas on how to improve the economy and that our country will be permanently impacted by more of the same. Policy makers don't know how lucky they are that treasuries rallied yesterday," Warren says.
Warren Capital Group is a registered investment advisor specializing in wealth protection and growth for high net worth individuals, institutions, foundations, and corporations. As a fee-based private wealth management firm, Warren Capital Group assists clients with asset allocation, risk management, estate planning and liability management via mortgage services. Warren Capital Group and its independent financial advisors are based in Washington D.C.