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Every article criticizing the Fed's actions misses the elephant in the room: the massive, spellbinding increase in USD via abnormally low interest rates since t
by newaccount2021 4y ago
Every article criticizing the Fed's actions misses the elephant in the room: the massive, spellbinding increase in USD via abnormally low interest rates since the 1990s (not just since Covid).
There is no modern historical analogue (in the USA, there are plenty elsewhere), so reflecting back on the 1970s is pointless.
The Fed still only has two choices - hyperinflation or depression. These are the cards you are dealt when you print money with abandon for an entire generation.
- tuatoru 4y agoWell, hopefully not depression. AIUI, the idea is to constrain the money supply until the quantity of goods and services around has grown to match the amount of money created, without too much disruption. The excess money printing happened because the government wouldn't expand goods and services demand after the 2008 crash. We always knew it was less useful and had a worse after-party hangover than doing the right thing, but the government wasn't doing the right thing, and it was the only thing a central banker could do to help people at the time. It was the right call at the time, in the circumstances. But now we've got the hangover.
- newaccount2021 4y ago
- Proven 4y ago