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We also had a massive pandemic that shut down half the economy and we took fiscal and monetary action to get through it with minimal chaos. I feel like we need
by matthewdgreen 4y ago
We also had a massive pandemic that shut down half the economy and we took fiscal and monetary action to get through it with minimal chaos. I feel like we need to remind each other of that from time to time, lest we just forget these extraordinary events.
- seanmcdirmid 4y agoThe cheap money was stressing the system before the pandemic relief came in and made everything fall over. You can't cut rates unless you are prepared to raise them, cheap money only works as stimulus if you make money more expensive in good times. If we were more conservative with our monetary policy, then we could have prepared better for the next stress event. At least we could stop things from getting crazy (e.g. the housing market). We've basically forgotten the 90s already.
- matthewdgreen 4y agoThe cheap money was not stressing the system. That’s the reason interest rates went back down after a brief rise in the late 2010s: everyone was worried about a recession and there was absolutely no sign of inflation in consumer prices.
- seanmcdirmid 4y agoIt totally was. There were plenty of signs of inflation in consumer prices, but more importantly in housing, we just chose to ignore them all like ostriches sticking heads in sand.