Friday, February 27, 2009

 

Don't Worry, Bernanke's Pushing Us Back Towards the Cliff

I noted two weeks ago that the monetary base had dropped significantly in the new year, and wondered whether Bernanke had come to his senses. Looks like that's a big fat negatory:


# posted by Bob Murphy @ 4:50 PM


Comments:
He was just backing off to get a good run-up.
# posted by Blogger furudo.erika : February 28, 2009 at 8:58 AM
 
What isn't clear to me is why the expansion of the monetary base will be inflationary over the short term. The commercial banks with whom the Fed transacts to expand the money supply electing to build excess reserves rather than expand their balance sheets (make new loans). Is the assumption of high inflation implicitly assuming that the excess reserves in the banking system shrink? Is this consistent with the behavior of how banks operated in Japan post their monetary expansion?
# posted by Blogger Sine or Cosine : March 25, 2009 at 3:39 PM
 
Post a Comment

Subscribe to Post Comments [Atom]





<< Home

This page is powered by Blogger. Isn't yours?

Subscribe to Posts [Atom]