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Politics : View from the Center and Left
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To: JohnM who wrote (140762)7/13/2010 9:14:36 PM
From: Steve Lokness  Read Replies (1) of 543044
 
John;

So here is what Krugman says the fed should do;

It can buy longer-term government debt. It can buy private-sector debt. It can try to move expectations by announcing that it will keep short-term rates low for a long time. It can raise its long-run inflation target, to help convince the private sector that borrowing is a good idea and hoarding cash a mistake.

The first two I just don't have an opinion on - but I do rather think they are not the solution to rebound the economy. Do you? Well the fed sure has already said that they will keep short-term rates low for a long time. As to the inflation target - they can't get there now what makes you think that just changing the target anyone will believe them?

Admit it, the fed is about out of bullets and short of a big bluff they are squeaking the bottom of the bucket here.

Steve
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