tag:blogger.com,1999:blog-2761684730989137546.post891691802887640438..comments2024-03-29T07:30:30.121-04:00Comments on Mike Norman Economics: Bernanke Bid to Lift Housing Scuttled by Rising Ratesmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2761684730989137546.post-14051464762412142342009-05-29T13:41:22.247-04:002009-05-29T13:41:22.247-04:00The Fed is not "buying debt from the government." ...The Fed is not "buying debt from the government." It's amazing that a Nobel laureate economist doesn't understand this!mike normanhttps://www.blogger.com/profile/03296006882513340747noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-7273768317336053882009-05-29T11:43:11.768-04:002009-05-29T11:43:11.768-04:00from paul krugman :
"First things first. It’s imp...from paul krugman :<br /><br />"First things first. It’s important to realize that there’s no hint of inflationary pressures in the economy right now. Consumer prices are lower now than they were a year ago, and wage increases have stalled in the face of high unemployment. Deflation, not inflation, is the clear and present danger. <br /><br />So if prices aren’t rising, why the inflation worries? Some claim that the Federal Reserve is printing lots of money, which must be inflationary, while others claim that budget deficits will eventually force the U.S. government to inflate away its debt.<br /><br />The first story is just wrong. The second could be right, but isn’t.<br /><br />Now, it’s true that the Fed has taken unprecedented actions lately. More specifically, it has been buying lots of debt both from the government and from the private sector, and paying for these purchases by crediting banks with extra reserves. And in ordinary times, this would be highly inflationary: banks, flush with reserves, would increase loans, which would drive up demand, which would push up prices.<br />"<br /><br />printing money finally debunked by Krugman<br /><br />but consistently dubunked by the Norman for god knows how long ..googleheimhttps://www.blogger.com/profile/14459089745473598235noreply@blogger.com