Saturday, April 4, 2009

Inflation vs Deflation

Voltron says: This article suggests that the Fed increasing money supply will only have an effect if it is perceived to be permanent, yet the Fed Chairman has repeatedly stated that he intends to decrease the money supply once the economy recovers. As the fed creates more an more money, spinning it's wheels in a "liquidity trap" - because the market thinks it temporary - it is creating a larger and larger money bubble that will burst when they finally cave-in and decide to make the inflation permanent.

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