Donnerstag, September 02, 2010

Quote of the Day...

Just intuitively, if the inflation rate is at a 50-year low and the unemployment rate is near a 50-year high, it's hard to believe that the monetary dials are set right.

From here.

The man's got a point: there are too many who believe that the orthodoxy will come up with a solution. Keynes does not have a solution for our problem (he'd be aghast at the idea that during an upswing, government finances worsened, rather than having gotten better) and there really are no solutions that do not include either the gutting of holy calves or the dismantling of what are effectively Third Rails in US politics (the concept that the government can be the best solution for things like pensions and health care).

Anything else means you are living in denial of the problem.

Inflation at a fifty-year low and unemployment near a 50-years high = does not compute in the standard macroeconomic models.

Something has to give. The way things look right now, when it does give way, watch out downstream.

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