Monumental Stupidity
Mish comments on remarks from S.F. Fed president Janet Yellen:
1) Yellen wants to “pull out all the stops to ensure an extended period of stagnation does not occur”
2) Yellen wants to do this even though the “approaches are experimental, and there is a great deal of uncertainty concerning their likely effects.”
3) To top it off, Yellen admits that an extended period of stagnation will occur anyway: “Even with vigorous Fed action to restore credit flows, an extended period of economic weakness is likely.”
Yellen wants to pull out all the stops using experimental approaches to the fiscal crisis that she admits will not solve the crisis and might even be detrimental.
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Does “experimental” economic policy make any sense? Fareed Zakaria writing for Newsweek thinks it does. Please consider Writing the Rules for a New World
As bad as it looks, the current financial crisis will end. I don’t know when or how, but the combination of government interventions will eventually work. Why do I say this? Because governments are more powerful than markets. They can close markets down, nationalize firms and write new rules. And Washington has one other, unique power: it can print money.
I cringe when I read such monumental stupidity.
Every nation on the planet has the ability to print money. There is nothing unique about Washington’s ability. And if you print and spend enough of it you look like Zimbabwe. Yes the US will survive, but it will be in spite of such stupidity not because of it.
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