Fed's Hoenig: "I really want to take away the punch bowl before the room gets drunk because I think this punch bowl is a little bit spiked"

This is not a new theme for Hoenig. 

Remarks from a Washington speech earlier this afternoon.

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(Reuters) -- Persistent U.S. fiscal deficits would hurt the economy and pressure the Federal Reserve to loosen monetary policy, Kansas City Fed President Thomas Hoenig warned Wednesday.

"When you have debts and deficits that run very rapidly over time, real interest rates do rise ... and when they do, it has the effect of slowing down investments, slowing down the economy," Hoenig told the Council of Foreign Relations.

"And what happens? Inevitably you turn to the central bank," he added, calling on the government to address its fiscal issues now, without ignoring entitlement issues.

Hoenig also said U.S. policymakers should start preparing the market for a lifting of interest rates back to 1 percent to avoid future inflation problems.

"I really want to take away the punch bowl before the room gets drunk because I think this punch bowl is a little bit spiked," Hoenig, who has repeatedly voiced dissent against the Fed's ultra-low monetary policy, said.

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Hear from Hoenig himself...

This is Hoenig's best public speech.

Video:  Hoenig speaks to a local Kansas City Tea Party group - Sep. 23, 2010

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From last week...

• KC Fed President Issues New Report Calling For 'Break Up' Of J.P. Morgan, Goldman, Citigroup & Bank Of America

Comments

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[DailyBail]

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[john]

My glass is half full but the bottle is empty,
They stole all our money,
now our pockets are emtpy,

Ben tells us there it's improving,
we know he had lied,
congress was in on it,
now there is nowhere to hide,

My glass is half full but the bottle is empty,
They stole all our money,
now our pockets are emtpy,

I drink a toast to bill, (clinton)
I drink a toast to al, (greenspan)
I drink a toast to wall street,
I drink a toast my pal,

They say it might be optmism,
they say it might be crass,
But for chisssakes almighty,
There nothing in my glass,

My glass is half full but the bottle is empty,
They stole all our money,
now our pockets are emtpy,

The bottle is gone,
oh what a shame,
my glass is now empty,
so much for fame!

john, 2011

[j r]

This guy must be out of the loop. Maybe someone should send him a memo. "Tom, the whole point is to create inflation. Do you think we're that stupid and don't know what we're doing?"