notes Jan 5
January 5, 2009 § Leave a comment
henry liu gets it right.read
Monetary easing should only be tolerated in times of real systemic financial distress in the economy. It should never be administered as a convenient anesthetic to forestall market corrections. Instead, Greenspan in his 18 years at the Fed had repeatedly treated every cyclical market downturn as a potential systemic crisis that justified massive liquidity injection by the central bank, only to create larger and larger serial price bubbles as new phantom cycles of growth to defy financial gravity.