Niskanen Decries Excessive Fed Generosity
Everything confirms his judgment that the Fed is acting too fast and furiously, and that government is in bail-out mode, adding fuel to the inflationary fire. Both these actions will exacerbate the overfeeding of our economy with credit, instead of allowing the marketplace to destroy the mirage of unhealthy stuff.
[Thanks to Worth1000.com for the photo of this overfed squirrel.]
The result of credit excess is price inflation. For years, the Fed and the overconfident public have been denying the existence of an inflation problem, not wanting to recognize it because it is camouflaged inside bubbles.
They will soon get their general price inflation, as the prices of all commodities continue to move up pretty much in unison (gold, silver, platinum, wheat, oil, etc.) At the same time, they will destroy the dollar, which is continuing its drop relative to other currencies (now at almost $1.53 per euro, for example).
There seems to be no end in sight just yet. Oh, and by the way, you thought things were bad under the Republicans. Just wait to see what happens if/when a populist, outright tax-and-spend Democrat gets into the White House.