Thursday, May 27, 2010

Too much easy money will be a problem

http://www.nytimes.com/2010/05/27/opinion/27einhorn.html?ref=opinion

Great op ed from the NY Times today explaining the pitfalls of easy money. As the article points out, it's more than just inflation. Feeding asset bubbles and artificially improving the fiscal position of govt's are also the results of easy money.

I personally agree with this op ed and other economists who say that the Fed Funds rate needs to be raised. Unfortunately, the dovish behavior of the Bernanke Fed makes this unlikely at the moment.

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