Posted by Larry Doyle on June 20th, 2011 8:07 AM |
Over the last few years I have highlighted the fact that the deflationary impact of declining wages and home values gave cover to the Federal Reserve for maintaining an excessively easy monetary policy and pumping up asset prices via quantitative easing. That party would now seem to be over. Why?
There is no doubt that Fed chair Bernanke’s easy money has played an integral role in the inflation we are experiencing at the pump, in the supermarket, and across a number of other commodities.
As we continue to navigate the U.S. economic landscape circa 2011 and beyond, the ongoing decline in home values in many regions of our nation now would seem to be setting the table for an inflationary spike in housing costs. How so? What is going on here? (more…)
Posted by Larry Doyle on June 28th, 2010 9:48 AM |
Paul Krugman today sends a serious shot across the bow of those who believe in fiscal prudence and real sense on cents. Krugman, a widely read and highly respected Princeton economist writes in The New York Times, The Third Depression:
Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses. (more…)