I have re-written and edited this at least three times to avoid the "politics ban". According to Bernanke, the Fed will not increase interest rates until 2014 at the earliest. Banks are paying virtually zero on savings accounts and their returns on loans are getting squeezed. Remember that banks have to allow for "non-performing" loans. Then we add in yet another Obama program to "help borrowers" plus the burst dam of foreclosures flooding into the legal system.
I hope I am wrong but this is a recipe for disaster. It seems designed or intended to clobber the dollar and ignite inflation. It has to be because as much as I disagree with their policy, I can't believe the Open Market Committee is actually composed of the mentally retarded. I can never remember a time when this much cheap money was sloshing around the economy for so long a time. Not even Arthur Burns ( I guess I can't call him the " Village Idiot" anymore lol ) was this loose. Not on his worst day and there were many.
Maybe I am missing something but we've had three periods of genuine extended prosperity with low inflation in my lifetime: 1963 to 1969 ; 1983 to 1991 and 1997 to 2007. (Some argue that the latter two periods were really one two-decade long run.) In those times we had a strong dollar and government spending as a share of GDP well below 20%. We had economic growth with relatively low inflation and good employment numbers. Except of course, when Bush The Dumber let the dollar decline which some argue was a root cause ( A Cause , not THE cause ) of the Financial Crisis and resulting Great Recession.
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