The Fed has essentially created the biggest shipment of currency ever, but the crippled banking system hasn't yet delivered it to our prison camp. When it arrives, it might be handy to have some spare smokes around to trade with.
At no point in his speech did Mr. Dudley raise the possibility that the main source of asset bubbles could be the US central bank itself.
I wonder if Paul McCulley has ever entertained the idea that massive fiscal and monetary bailouts actually retard recovery?
There are only inflationists on Capital Hill and Obama has a bigger bag of boondoggles than FDR could have ever imagined.
Even if the "debt deflation" scenario is generally right, the absolute effect could be swamped by the relative effects, meaning that retirees on fixed dollar incomes could still get wiped out when their standard monthly expenses rise.
Government spending merely directs scarce factors of production away from their most productive uses.
