Under the rubric of QE2, the Federal Reserve Bank is engaged in the venture of increasing the money supply with the goal of moderately increasing inflation. I fear that this venture is misguided and destructive. I believe it will result in inflation exceeding the Fed’s goal, if it has not done so already, and that the Fed will apply the brakes well after the damage has been done, as is its custom. I find the complacency regarding QE2 almost unbelievable. Shouldn’t Fed Chairman Ben Bernanke be proclaiming “mission accomplished” by now?
Among recent observers commenting on the Fed’s project is Andy Kessler last week in the Wall Street Journal: “Unfortunately, when you print dollars, you debase the currency–and it shows up in higher oil prices, already rising well before the rebellions in Egypt and Libya. Copper and wheat and food are also seeing increases. For that matter, just about everything is rising except home prices….What Mr. Bernanke’s dollar printing has given to consumers in a supposed wealth effect, it has taken away in the cost of living.”
James Freeman’s interview with hedge-fund manager Paul Singer in this past Saturday’s Wall Street Journal was also of great interest. Freeman quoted Singer to the effect that monetary policy “is extremely risky.” The risk, of course, is of “massive inflation.”
In a category of its own is Seth Lipsky’s New York Sun editorial “A ‘unique’ form of ‘terrorism.'” The editorial is a meditation on the governments recent conviction of Bernard von NotHaus for creating and distributing counterfeit currency. I urge you to read it all.
The heading of this post is adapted from Rick Moran’s excellent Right Wing Nuthouse.
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