Thursday, November 4, 2010
Phil Flynn: Inflation Is Good For You
It was clear that the Fed wanted to exceed the expectations so we would not sell the fact and take away some of the inflationary expectations they had built into this market. That's right. Inflation is not the worst thing in the world. At least that's what Ben Bernanke says and he is making it clear that worries about his policies creating inflation are over blown. He says that QE1 did not spark inflation and he does not expect that QE2 will either. In an op-ed with the Washington Post he tries to explain why he did what he did.
He says that, “The Federal Reserve's objectives, its dual mandate set by Congress, are to promote a high level of employment and low, stable inflation. Unfortunately, the job market remains quite weak; the national unemployment rate is nearly 10 percent, a large number of people can find only part time work, and a substantial fraction of the unemployed have been out of work six months or longer. The heavy costs of unemployment include intense......Read the entire article.
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