Summary:Â We have begun a critical phase in the great monetary experiment. We know that we should stop, but our leaders fear the resulting economic shock. They fear to stop, fear to continue. There is a clear model describing this process, but one too disturbing for most people to accept: addiction. The decisions made during …
The great monetary experiment enters a new phase, with America as the stakes Read More »
Summary: Quantitative easing is the easy cheap stimulus (unlike the politically difficult but effective fiscal action. Like heroin, it provides a lift with no ill effects. Slowly economists begin to realize that the cost of QE is not paid up front, but during withdrawal. Faced with the necessity and cost of tapering, last week the Fed wiffed. …
Two warnings about quantitative easing, the taper, and what comes next Read More »
Summary: Among the many goals for the FM website, two are perhaps the most important. First, we are too often lost in the now. Buried in the daily multimedia tide we lose sight of our track — the trend of events, which we see only by frequently looking backward along the path. I believe the …
Summary: We have now had a 24 hour avalanche of analysis about the Fed’s decision not to taper. Most technically accurate, as economic news often is. But myopic, as news coverage usually is. Today’s post gives a wider perspective on this decision, putting it in the content of the Great Recession and the following slow …
Different answers to your questions about the momentous Fed decision to delay tapering Read More »
Summary: Today America passed an important fork in the road, an easy exit from the massive monetary stimulus running since the crash. If the economy continues its slow growth (well below the 2% stall speed) today might have been the last opportunity for an easy exit. Today also demonstrated the madness that infects us, as …
