[quote=Rich Toscano]UR – When Krugman was cheering on ultra-easy monetary policy after the dot com crash (and then bemoaning the slightly less ultra-easy policy in 2004), he was oblivious to the distortions all that money and credit creation were causing (the housing bubble was already raging in 04), and to the problems they’d eventually cause.
Now he’s doing it again. This time around, our own currency is at risk. I agree that no dramatic consequences have happened yet, but I believe they are baked into the cake and that Krugman-esque policy will eventually be looked at as a giant, tragic mistake.
Rich[/quote]
Yeah I get that you don’t like him but I am curious how you see them baked into the cake.
You have described many time the imminence of a pronounced inflationary event (at least that is how I remember it–there was alcohol) but I would really like to see what the model you are using looks like when it is unpacked. I am actually not necessarily in disagreement with it. Its just that he is (in this particular case) better at drawing out his ideas than you have been.
For example do you see the enhanced monetary base getting recklessly lent out at high speed to increase global effective demand at a nominal level?
Or do you see us needing to jack up rates on govt securities to pay paul?
While I often disagree with you, you don’t generally see boogeymen.
Tell me what you are seeing. I have read the other articles on this topic and found them less illuminating than what I am looking for.
I just want an idea of what you see as the steps here.
Putting that differently:
How exactly do we crash the plane into the mountain??
