Bernanke Doctrine

This article is very cleverly written. The author first lists measures proposed by Bernanke six years ago to combat deflation. He refers to this as the Bernanke Doctrine and he then puts a check mark against steps already taken by the Fed.

1. The Fed can print money which will produce more dollars in the economy and lead to inflation.
Status: Done

2. These dollars are then implanted into the banks. Bernanke said that according to John Maynard Keynes's proposal, in combating deflation, the government fills bottles with currency and buries them in mine shafts for the public to dig up.
Status: Done

3. Interest rates are cut, even if it means taking it down to 0 percent. The Federal Reserve has, so far, lowered interest rates nine time in a row, from 5.25 percent to 1 percent. The central bank should place caps on yields paid by long-term Treasury bills. Therefore, the Fed will engage in bond price pegging, like it did after WWII.
Status: Pending

4. The Fed lends zero interest dollars to banks for a fixed term, taking back corporate bonds as collateral. This way, the Fed can determine yields without necessarily buying securities. This would make banks lend out these dollars so there is more money floating in the economy, causing inflation.
Status: Pending

5. U.S. dollar is depreciated, just like during the Great Depression. This, along with printing of money, would help end deflation.
Status: Use when everything else fails

6. By foreign currencies on a massive scale and cause de facto depreciation. The quantity of foreign assets available for purchase by the Fed is several times the stock of U.S. government debt, so there is a huge scope for the Fed to reverse this deflation process.
Status: Use when everything else fails

7. The money created by printing is used to buy industries throughout the country. This way the Fed would acquire private asset option.
Status: Technique tested, full deployment pending.

The Federal Reserve has mostly done the easy part already. It still has many more options and measures to reverse the deflation process.