In a blistering attack, the Wall Street Journal today criticized the Federal Reserve’s inflationary easy-money policy, which aims to bail out mortgage borrowers through low interest rates, but caused the dollar to collapse in value against foreign currencies: “The dollar plunge has translated into a net transfer of trillions in wealth from the U.S. to the rest of the world. The result has been the largest decline in America’s global economic influence since the 1970s.” The Fed’s policy has also been condemned by international investors and economists, like investment bank Julius Baer, which criticized the Fed for spawning an “Age of Decadence,” ”by allowing asset bubbles to form unfettered; by maintaining ultra-lax monetary policies; . . . and, by succumbing easily to the faintest political pressure.”
Categorized | Economy, International, Precaution & Risk
Fed’s Inflationary Easy-Money Policy Hammered
by Hans Bader
June 05, 2008 @ 12:04 pm
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[...] economy also faces other risk factors, such as short-sighted federal policies designed to prop up overextended borrowers. Those policies may also be reducing the flow of investment in the U.S., in addition to costing [...]
[...] economy also faces other risk factors, such as short-sighted federal policies designed to prop up overextended borrowers. Those policies may also be reducing the flow of investment in the U.S., in addition to costing [...]
[...] Fed’s inflationary easy-money policy, and a government-enforced credit-ratings oligopoly, also contributed to the [...]
[...] and see how it’s working for them.” (The economy is already at serious risk from the Fed’s inflationary easy-money policy, which helped spawn the mortgage [...]
[...] rates since 2001 helped spawn the current financial crisis and the mortgage bubble, greatly weakening the value of the U.S. dollar and reducing capital investment in the [...]
[...] day of reckoning for years of excessive borrowing that occurred in what Julius Baer calls “The Age of Decadence.” The Fed’s absurdly low interest rates are impoverishing savers and punishing thrift [...]
[...] this year and $1.2 trillion next year. But all that debt, and government coddling of borrowers, has simply driven down confidence in the United States, and the value of the dollar, while failing to keep us out of a recession. « We Can’t Afford Much More Stimulus! [...]