Friday, September 23, 2016

No, The Fed Doesn't Have A Plan. 
Yes, The Fed Really Is 
Monetizing Government Debt
Free market economist Jeff Deist: "Many economists, mostly Austrians but also certain fellow travelers, have argued for years (even before QE) that the Fed's willingness to buy Treasury debt represented a kind of blank check for Congress: don't worry about the debt, spend what you need to prevent the natives from getting too restless... Just issue Treasuries to paper over the deficits, and we'll be here (wink wink) to provide a ready backstop market. No need to raise rates. And Fed critics, again mostly Austrians, have argued since the financial crisis that 'normal' monetary policy would never return, that QE would never be unwound, and that artificially low (or even negative) interest rates were here to stay. In other words, that the Fed and its 300 Ivy League economists don't know what to do other than kick the can down the road another few months while hoping for a miraculous economic recovery .. The Fed is clueless, and there are no brilliant people in Washington working on a 'plan' to save us. Extraordinary monetary policy is the new normal, and all those pundits who assumed the Fed knew what it was doing were- and are- wrong."
LINK HERE to the essay

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