The Washington Post this morning writes about the central issue, buried in all the blah blah about stimulus this and stimulus that: what the heck is going to happen in light of the trillion (trillions?) in new money created by the Fed to create the illusion that the bust isn’t happening? How will the U.S. avoid a Weimar scenario?
The article just presumes that the money will be sucked out the same way it was pumped in: “Determining the best time to withdraw that money is a classic quandary for central bankers.”
A classic quandary? When was the last time a central bank set out to shrink the money supply? A similar question: when was the last time a gang of thieves put property into people’s houses rather than took it out? Or: when was the last time a fox protected hens from harm?
Anyway, the article quotes Helicopter Ben: “We’re working very hard, and it is important for us to provide a lot of support right now. The economy needs support... We understand the necessity of winding this down at the proper moment so we will not have an inflation problem at the other side.”
His “other side” comment tempts one to gastrointestinal metaphors that I’ll avoid.
