Tuesday, July 21, 2009

Bernanke's Exit Strategy

I have noted before that while I supported the Fed increasing the monetary supply during the financial crisis last fall, I am greatly concerned about where all that money is going to go once the economy starts to recover and hundreds of billions of dollars that are sitting on the sidelines right now in bank reserves start getting lent again. It could be a recipe for huge inflation.

Fed Chairman Ben Bernanke has an encouraging column in the Wall Street Journal today on how they plan to avoid hyper inflation.

The question rumbling around in my head now is what side effects the inflation fighting policies will have. I will have to study it more.

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