What a great idea. Nobody ever thought of printing money as the solution to a nation's economic problems.
If all this bailout money is being used for our sake, why can't the government disclose what it is doing with it?
“Do you sincerely believe that they will catch her before she becomes a problem?”
They might not, but the fact that they are expansionary now doesn’t mean they will be expansionary when inflation is out of control. I would point out that the stock of high powered money did not grow at all for about a year because Bernanke was trying to put a brake on the inflationary pressures caused by the increase in oil prices. In fact, it was that tightening that caused the breakdown in the financial markets in October. Immediately after the breakdown, he realized that the new enemy was not inflation, but recession. So he started increasing the stock of high powered money like crazy. But the problem is that the money is stuck in the banks and in any event, high powered money doesn’t mean that much anymore. Exchanging federal securities (which are already quite liquid) for money (which isn’t much more liquid) doesn’t increase overall liquidity that much. He needs to buy nonliquid assets that the fed doesn’t normally buy, directly from the private economy, if he really wants to make a difference.
What a great idea. Nobody ever thought of printing money as the solution to a nation's economic problems.
If all this bailout money is being used for our sake, why can't the government disclose what it is doing with it?