June 6, 2011

Government-Assisted Economic Suicide

By Monty Pelerin
Quantitative Easing ends in June, according to Ben Bernanke's initial commitment.  As June begins, the ending seems in doubt despite Fed statements regarding its imminent demise.  These comments are perfunctory propaganda and will ultimately prove to be as premature as those of Mark Twain's misreported death.  Twain eventually died; so too will QE.  It just will not do so now, at least on a permanent basis. There will likely be a face-saving pause, after which a new "crisis" will be discovered or imagined.  The recent plunge in the stock market is a likely excuse if it continues, although nowhere in the Fed's charter does it suggest that "pumping" financial assets is a proper role.   There is no economic case for quantitative easing, nor has there ever been one.  Quantitative easing is simply a political gimmick.  Knowledgeable economists understood that QE2 would not produce economic improvement.  "Rented" government economists (political...(Read Full Article)