...announce a fairly high inflation target over an extended period, and commit to meeting that target.
What am I talking about? Something like a commitment to achieve 5 percent annual inflation over the next 5 years — or, perhaps better, to hit a price level 28 percent higher at the end of 2015 than the level today. (Compounding) Crucially, this target would have to be non-contingent — not something you'll call off if the economy recovers.
~ Paul Krugman, from If I WereKingBernanke
Thursday, November 4, 2010
Quote of the Day: Paul Krugman
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Hey...if 5% doesn't work let's shoot for 10%. Better yet why don't we reconstruct the Soviet Bureaucracy and control individual prices and pass a law saying business has to increase their prices by 5%.
ReplyDeleteThe Fed fooled a lot of people in 2003 by lowering rates to 1% and then turning around and jerking them up to 5.5% by 2006. Isn't it time they got out of the trickery business? Businesses get tired of getting fooled. They are not going to hire people until this nonsense stops.
Looks like precious metals and the markets are happy about QE2, but to be honest, it scares the $*#% out of me. Rising prices on money printing is nothing more than false prosperity, and it's going to crash and burn sometime.
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