One of my biggest complaints about the media is the lack of accountability. People say things on TV in print an on radio, and then . . .  Poof!  No consequences. They influence public perception of issues, affect policy debates, drive legislation.

This is a perfect example of a stern warning of currency debasement and inflation due to QE. Let me point out this was made 3 years ago today — hence, it has been terribly wrong.

I won’t give you advice — but I keep track of who is consistently wrong, whose histrionic forecasts are both silly and wrong. Their future comments are valued accordingly.


e21 Team | 11/15/2010

To: Chairman Ben Bernanke
Federal Reserve
Washington, DC

Dear Mr. Chairman:

We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.

We subscribe to your statement in The Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.


Cliff Asness
AQR Capital

Michael J. Boskin
Hoover Institution, Stanford University
Former Chairman, President’s Council of Economic Advisors

Richard X. Bove
Rochdale Securities

Charles W. Calomiris
Columbia University Graduate School of Business

Jim Chanos
Kynikos Associates

John F. Cogan
Hoover Institution, Stanford University
Former Associate Director, U.S. Office of Management and Budget

Niall Ferguson
Harvard University
The Ascent of Money: A Financial History of the World

Nicole Gelinas
Manhattan Institute & e21
After the Fall: Saving Capitalism from Wall Street—and Washington

James Grant
Grant’s Interest Rate Observer

Kevin A. Hassett
American Enterprise Institute
Former Senior Economist, Board of Governors of the Federal Reserve

Roger Hertog
Hertog Foundation

Gregory Hess
Claremont McKenna College

Douglas Holtz-Eakin
Former Director, Congressional Budget Office

Seth Klarman
Baupost Group

William Kristol
Editor, The Weekly Standard

David Malpass
GrowPac, Encima Global
Former Deputy Assistant Treasury Secretary

Ronald I. McKinnon
Stanford University

Joshua Rosner
Graham Fisher & Co., Inc.

Dan Senor
Council on Foreign Relations
Start-Up Nation: The Story of Israel’s Economic Miracle

Amity Shlaes
Council on Foreign Relations
The Forgotten Man: A New History of the Great Depression

Paul E. Singer
Elliott Management Corporation

John B. Taylor
Hoover Institution, Stanford University
Former Undersecretary of Treasury for International Affairs

Peter J. Wallison
American Enterprise Institute
Former Treasury and White House Counsel

Geoffrey Wood
Cass Business School at City University London

(Institutional Affiliations are for Information Only)

See the letter as printed in the Wall Street Journal (PDF)



An Open Letter to Bernanke of Dubious Authorship (November 15th, 2010)

Category: Currency, Inflation, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

75 Responses to “2010 Reminder: QE = Currency Debasement and Inflation”

  1. scone says:

    Heh. A Who’s who of the right wing, with a strong whiff of dead Rand…

  2. Denecke1 says:

    What if it’s correct four years later instead of three years later? Isn’t the effect of expanding the money supply by such a large amount ultimately going to be inflation?

    I remember in the late 90′s when people were saying that technology stocks were not a bubble because the internet had fundamentally altered the efficiency of economy. I kept looking at it thinking this has got to crash at some point, but it didn’t … until a few years later. Sure enough the laws of economics hadn’t actually changed.

    Seems like a similar situation now. Inflation hasn’t run rampant yet because the economy has been trying to catch up after the last recession and economic difficulties internationally. Once it does catch up, look out.

    • Then it was a terrible trade.

      What I want to know is why people are taking policy suggestions from this crew

    • snaildarter says:

      Ritholtz calls it a bad trade presumably because if it takes a trade that long to work you go broke in the meantime. My version: it’s a bad trade because it gives policy priority to presumed future costs over the urgency of dealing with actual current havoc.

    • heropass says:

      lol. All this waiting for inflation to show up, but where are we? The maw of deflation keeps sucking us back toward it. The Fed would love to see a sign that inflation isn’t dead. You sure don’t see any sign in wage growth.

      Monetary theory is in serious need of retooling. Friedman was ultimately wrong about the deep structure of the money market and the freshwaters need to accept that and get over it.

    • hoppers13 says:

      If you do a forecast, you should frame it within a time period. A weather forecast that tells you it’s going to rain… in the next 25 years, it’s not very helpful. Yes, I agree there will be high(er) inflation, at some point, but if it’s going to happen in 12 years, I still think this forecast is not really spot on. Also, I may believe there will be higher inflation at some point, but higher inflation and raising unemployment at the same time… that I find harder to believe

    • ibnyamin says:

      You can see from this graph that all the increase to the monetary base from QE has been almost exactly matched by increased excess reserve deposits at the FED. Until banks start lending these reseves out, there won’t be a mechanism to create inflation. The “catch up” you talk about will only occur if the FED lets it happen. But the FED can destroy money as well as create it. Inflation may rise above the target, but it won’t get out of control.

    • NMR says:

      Dept Commerce annual inflation numbers today! CPI 1% Core 1.7%. The economy caught up two years ago (in the sense of exceeding pre-crash peak in real terms).

  3. ByteMe says:

    As I’ve been saying for a while: let’s HOPE for a currency debasement and inflation! it beats deflation and a debased manufacturing base (exports are higher when the dollar goes down), the former was a real possibility and the latter was problem 30 years in the making.

  4. flocktard says:

    God, with the exception of Chanos, whose no dummy, the rest of this lot is a rogue’s gallery. Linking Bove, Grant, and Malpass has a certain serendipity to it!

  5. Low Budget Dave says:

    I was generally opposed to QE until I read the list of political hacks at the bottom of that letter.

  6. CSF says:

    A good point, BR. To be fair, their other warnings are shared by folks on the right and the left, and they have some merit. They claim that QE would distort financial markets, and it has unquestionably punished savers and rewarded large financial institutions and the wealthy. They warn QE might be difficult to unwind, and 6 weeks ago we began to see this may be true. They claim QE is unhelpful to the global economy, and while that’s debatable, EM countries would certainly agree.

    • My goal is to hold any and all pundits accountable, regardless of political affiliation.

      Since they went anti-Scuence, the Right has been much more likely to find itself saying dumb things and making dumber forecasts.

      But its a pretty non-partisan idea: Hold public figures accountable for what they say.

  7. rd says:

    The irony is that this letter probably makes far more sense today after three 3 years of QE than it did in 2010.

    I believe their preferred formula for the “improvements in tax, spending and regulatory policies” meant more tax cuts, spending cuts, and financial and environmental sector deregulation which generally seem to have been part of the cause of the problem in the first place or have contributed to a slow recovery. It is not clear that their prescirptions for remedies would have worked any better than QE.

    It also seems that more central banks have been signing on to Bernanke’s QE approach in their own realms over the past few years as austerity etc. doesn’t seem to have had the desired effects.

  8. theLorax says:

    Au contraire, ginned up asset prices (stock market and real estate) is inflation and job growth has been weak. Markets are distorted and the Fed is clueless as to how to exit QE. You have biases that color your perceptions.

  9. milkman says:

    Surprised to see Klarman’s name there. Guess he’s not as careful with his politics as he is with his “value” strategy. Hopefully it doesn’t have anything to do with Israel….

  10. RW says:

    What scone said plus the signers of this letter were so wrong it’s hard to even call it wrong, as in like gamma quadrant: not only did they get the prediction of inflation wrong they got the macroeconomics and the optimal policy options wrong; e.g., what this country really needed and still needs is a ‘debased’ AKA cheaper dollar.

  11. TKT says:

    “One of my biggest complaints about the media is the lack of accountability.”
    And yet you continue to cross-post John Mauldin’s recycled and unoriginal fear mongering?!?
    Where’s the accountability there? What IS your arrangement with Mauldin?

    • Years ago, I used to post Johns work site unseen. As he went deeper into the partisan craz, less of it appeared here.

      You will note that I post less and less of his work these days.

    • DeDude says:

      I don’t think posting something is the same as endorsing it. If it was, how could Barry post both “Washington Blog” and Mauldin’s writings. Although Berry does not post their writings with his own comments attached (that would be rude), the comment section tend to hold them accountable for the worst of their offenses. It is important to understand where other people are coming from even if you don’t agree with them – remember they are often the other side of your trades. Although we may not need to see the same basic mistakes in presumption and logic every week, it is not a bad thing to be reminded of them every now and then.

  12. theexpertisin says:

    There are times when expressed opinions are mocked for several years, but at a much later date eventually prove to be correct. Winston Churchill comes to mind.

  13. Invictus says:

    Amity Shlaes. LOL.

    • The Window Washer says:

      Yeah I was looking for my fifth grade teacher to be on the list somewhere after she showed up.

  14. 873450 says:

    Indefinite QE is maintained only because a dysfunctional U.S. Congress willfully conjures up unnecessary fiscal crisis repeatedly threatening a fragile economy so frequently that avoidable fiscal cliffs are now a predicted, applauded and rewarded political strategy.

    “We subscribe to your [Bernanke's] statement in The Washington Post on November 4 [2010] that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.”

    A frustrated, exasperated Bernanke has been outright saying this louder and louder to dysfunctional Congress insulting him for more than three years. An independent, functioning Fed is telling a dysfunctional Congress it will maintain QE longer than Congress dysfunctions, through an election cycle if necessary.

  15. Denecke1 says:

    Would you still consider this to be wrong if it happens in 4 years, instead of 3? I just don’t see how they can keep expanding the money supply like they are without causing inflation.

    • Way way early = wrong in my world

    • Steve Hamlin says:

      ” I just don’t see how they can keep expanding the money supply like they are without causing inflation.”

      The “money” is created when the USGovt deficit-spends it into the checking accounts of Gov’t payees every day, not due to anything the Fed is doing.

      As long as the economy is running this far under potential GDP, then ultimately the banking system holds all of that money on deposit at the Fed, and it’s as if it doesn’t exist (and in one sense, it doesn’t: if you hold both an IOU from yourself and an IOU to yourself, does that really matter to anyone else?)

      The test of inflation will be how the Fed manages its balance sheet when the demand for money increases, and banks start to withdrawal those excess reserves from the Fed and deploy those USDollars into the real economy. But I’d rather deal with that potential problem THEN, than continue to deal with the horrific actual problems we do have NOW. Why hurt ourselves now in order to possibly avoid hurting ourselves in the future?

      • 4whatitsworth says:

        When the Fed buys bonds it creates a lower interest rate so the interest rate expense goes down for almost everyone home owners, large corporations, and federal state and local government. This reduced interest expense creates additional free spendable cash. Goods produced are less flexible so normally this would create a situation where there is too much money chasing too few good (Inflation) however this time it’s different… maybe.

    • DeDude says:

      And your problem is the same as the people signing that letter. You model/concept of inflation suggests that expanding money supply leads to increased inflation. Having faced data and a reality where expanded supply of money is not causing higher inflation you fail to question your basic model/concept of inflation and instead say its just delayed because of “mumble mumble mumble” and it will eventually happen.

      Inflation is not caused by money supply but by monetary momentum (= money supply x money velocity). So expanding money supply at a time when money velocity is sinking will not cause inflation. On the other hand if money velocity is constant then increasing supply will create inflation.

  16. BenE says:

    Although, I applaud the efforts to increase accountability and I have argued here many times that central banks need to be more accommodative, these kinds of posts are dangerous to make because, monetary policy can make the value of money move in weird ways and it is quite possible that we will see spikes of inflation in countries that used QE, especially in places like Japan.

    The problem is that unconventional monetary policy needs to be implemented in a hard and swift manner to stabilise the economy. Instead what we have gotten is soft and long QE.

    The fact that central banks perpetually undershoot their inflation and unemployment targets means that we are stuck doing QE for far too long periods of time and lots of idle money is accumulating on the sidelines without economic activity increasing enough to back this money. Japan has been doing this for very long.

    On top of that, the US central bank has started paying interests on reserves in order to more easily neutralize QE in the future and keeps mentioning how easy it will be to reverse QE as soon as the economy gets going. QE works through expectations channels and edges on the fact that the market thinks some of the money will be left in the economy after we are out of the liquidity trap, at least enough to catch up to longer term inflation trends. When the fed convinces the market that all QE money will be neutralized later, it greatly diminishes the effects this money has now and instead turns it into a dangerous pile of idle cash.

    QE could actually be performed more aggressively with a lesser amount of money creation using instead a more credible commitment that this money won’t all be pulled out of the economy as soon as things seem to get better. However, central banks seem way too afraid of inflation to commit to leaving money in the economy until we’re caught up to trend.

    If we get uncontrolled inflation in the next decade, the people mentioned above will use it as an argument against doing QE when it will have been the anemic use of it for too long that will have set us up for inflation.

    Answering the simple question of there being or not too much inflation after QE is incomplete reasoning. There are lots of movements that seem paradoxical with monetary policy. This has to be taken into account.

    As Nick Rowe says about how monetary policy is performed:

    “It’s so hard to explain this simply. The best I can come up with is the pole/broomstick metaphor: you are balancing a pole upright on the palm of your hand. If you want to move your hand North, you must first move your hand South, let the pole start to lean North, then move your hand North.

    But that metaphor doesn’t work exactly, because economies are composed of people, who have expectations, unlike dumb broomsticks.

    “If you want peace, prepare for war” doesn’t work exactly either, but sort of gets the element of conditional expectations.

    We really need a better metaphor.”

    (From a comment under this post: and explained in more details here:

  17. cornbin says:

    BR your general point is spot on, and this list of people who signed the letter is good fodder on its own, but if you take away the last paragraph (that other central banks don’t approve of the strategy – THAT is hilarious) nothing in that letter is “wrong.” Unless I’m missing something, there is no time limit or target date mentioned. Maybe that’s your point? Clearly, meaningful currency debasement and inflation have not happened yet as a result of QE, but at some point these concerns might actually come true (and of course, they might not).

    You could have picked a better example to illustrate your points that nobody is held accountable, and people who are consistently wrong continue to give advice.

    Thanks for continuing to post such thought provoking material for free.

  18. 4whatitsworth says:

    I think these folks miss understood the balancing effects of a bumbling government. Tax Hikes, the Sequester and massive uncertainty keep monetary velocity down.

  19. Frilton Miedman says:

    One thing I think is being overlooked, I suspect that the addition of Gramm-Leach-Bliley and the CFMA have altered the way money supply behaves & made it more lucrative to apply excess reserves elsewhere aside of traditional lending.

    A simple glance at Fred charts of money supply, excess reserves and velocity is jaw dropping, food for thought that maybe banks are using excess reserves as some form of collateral for proprietary trades instead of lending.

    If that’s the case, look for the CFTC & SEC finalizing the Volker rule and Dodd-Frank position limits – If I’m not just grabbing at straws, that’d mean a slight change in the rules of the game would equate to massive shifts in excess reserves.

      • Frilton Miedman says:

        Everything we know about money supply & excess reserves revolves around the fact that banks have always offloaded excess reserves as fast as possible, something has changed that.

        Just take a glance at Fred excess reserves –

        Something happened in 2008 that hasn’t happened before in Fed history, banks suddenly have more incentive to hold reserves than lend them.

        Like I said, maybe I’m grabbing at straws, but something has caused it and it’s unnerving when you look at that chart.

    • Steve Hamlin says:

      @Frilton Miedman wrote “Something happened in 2008 that hasn’t happened before in Fed history, banks suddenly have more incentive to hold reserves than lend them.”

      Hmm, I wonder what could have happened in 2008 that fundamentally changed people’s demand for money over the short term?

      Federal deficit spending is creating new money every day, and the demand for that new money by the public is nonexistent, so it winds up getting held at the Fed. Banks are holding $1.5T in excess reserves at the Fed because they find the 0.25% IOER to be a better deployment of their assets than making loans to the private market.

      It really is that simple.

      • Frilton Miedman says:

        You’re conflating, mingling, Monetarism & Keynesian, they’re not the same.

        Excess reserves have nothing to do with the deficit, aside of a symptom of fiscal imbalance, wealth disparity.

        Bank reserves, private money separate of the government, earn interest wherever the bank feels the best yield is, usually by lending it, has nothing to do with deficit spending – which is borrowed money that has to pay interest..

        The only correlation there, is Fed policy in place of fiscal, it does not explain the sudden brick wall of excess reserves as of 2008, the lack of lending is unprecedented, look at the Fred chart.

        Even those points aren’t as important as the question of what happens when banks go back to lending those reserves, currently at more than $2 Trillion.

        I presented the notion that banks are using those reserves as collateral for prop trading via CFMA & GLB loopholes, just an idea, which arouses the question – regardless why excess reserves are so high – What happens when banks go back to lending excess reserves?

      • mathieson says:

        “What happens when banks go back to lending excess reserves?”

        You propose this as a cause of inflation – however as long as there is an extremely low interest rate there’s no reason for banks to loan funds. And there’s no reason for interest rates to rise while there’s excess reserves, as any funds actually used can be immediately replaced with excess capacity.

        Until you have potential GDP being realized, it will be almost impossible for actual inflation to occur.

  20. plato363 says:

    Barry- early and wrong and not necessarily the same thing, that is unless you go insolvent (and stay that way) or lose enough clients.

    The fact remains, the Fed’s actions will lead to more problems in the future. If the market was left to correct the imbalances on its, the economy would be and would have been far better off.

    • Frilton Miedman says:

      I completely disagree that we need to let things fall where they may, that’s the Randian/Austrian argument that fails to acknowledge the extremes to which we’d fall, and oversimplifies the real variables.

      The cause of such dramatic Fed policy is the extreme lack of Fiscal policy, 3 decades of faux trickle down that has only served to force the Fed into gradually making household debt cheaper, paid with decreasing wages for all but the top earners.

      Bush was the final nail in that coffin, Clinton didn’t help by signing off Glass-Steagall and the CFMA, both presidents failed to consider the effects of increased globalization.

    • mathieson says:

      “The fact remains, the Fed’s actions will lead to more problems in the future”

      That’s not a fact, it’s a prediction similar to the one above that has consistently failed to occur. Japan continued QE for a decade without the problems you’re predicting. Unless you can provide an actual reliable prediction, you need to stop claiming what the facts remain.

  21. ancientone says:

    For all of you who are convinced the Fed’s actions are going to eventually produce rampant inflation, please read Paul Krugman’s blog now and then. He has said (and explained why) it won’t for several years now, and nobody seems to ever listen to him.

  22. yenwoda says:

    Washington’s blog (which you also publish) has taken the same position:

    (the chart they show as a proxy for out of control agricultural inflation is currently at ~8, down from ~11 when posted in 2011).

    • Frilton Miedman says:

      He makes no mention of devastating crop yields from harsh weather in the last two years – 2012 was the hottest summer in recorded history, devastated US crops, the year before Russia saw a drought.

      I think the truth lies in excess reserves, when/if banks go back to doing what banks do, then we see inflation.

  23. AtlasRocked says:

    The greatest economic tool for keeping inflation down: Change the inflation sampling weights


    BR: That has been true over the decades, but it does not change the fact that at present, measure din a variety of ways, inflation is way low.

    Check it the Billion Prices Project.

    • Capitalist Canuck says:

      Huge problem with this, Barry.
      The BPP collects data from ONLINE retailers ONLY. Thing is, most people don’t buy houses, gas, heating oil, property tax, utilities, groceries, wages, tuition, etc. online.
      (I hear they’ve been trying to shop for health care online….)

      Not only that, but inflation is a rise in prices of ALL assets (not just consumables), no?
      Seems to me stocks (aka assets) have been on a multi-year tear.
      Just a thought.

      As for QE’s roll in this…time and math will eventually reveal all.

  24. ZedLoch says:

    I agree with some of the other comments that it may be too soon to determine ultimate effects of QE. BUT if you compare it to what the authors of this letter were/are peddling (austerity), QE is currently the clear winner.

  25. snowflake says:

    Great stuff. So give us the rest of the list. And is there one of those who are consistently right? Somehow I doubt it…

  26. Angryman1 says:

    QE is irrelevant as is the total amount of reserves unless they are exponentially expanding. The typical right-hegelians spout the same nonsense because they want to strip the nation state of currency control and give it all to a global cabal who would then run the global monetary system.

    The FED’s non-QE is consistantly being watched for “reductions”. It isn’t like the US hasn’t had some growth this year either. YrY growth will probably move higher by January. Little inflation pressure and declining prices now in stuff you “need” will help boost real gdp, eventually raising inflation juuuuuusssssssst enough to end QE and Zirp.

    The govs in the 12 banks know this as much as anybody.

  27. d4winds says:

    The Fed balance sheet massively increased Before QE’s in Aug 2008. At the same time in order to sterilize potential impacts of that & future balance sheet increases, the Fed for the **1st time** in its history adopted the policy of paying interest on reserves; Bernanke has been so confident of these interest payments for M2/M3 expansion sterilization that he has asserted that the Fed can dispense with reserve requirements altogether. In fact M2 has not massively expanded; it has grown at the same steady rate since 2008 has it had in the past. The critics are obvious fools; but many names on that list should know better than to assume, especially in post-Aug-2008 world that the Fed balance sheet is magically tied to M2/M3 or to inflation. The financial press has been especially derelict, ignoring non-headline policy changes with major implications.

  28. intlacct says:

    It’s a who’s who of RWNJ (right wing nut job) idiocy. Many of these folks have been wrong on FAR bigger things than this (and this is pretty big).

    How did Chanos stumble into that room?

    Good for BR on calling out Mauldin’s idiocy.

  29. Gaucho says:

    QE is unsustainable so I don’t criticize them for identifying an unsustainable trend, even if it is early.
    I do criticize for not being honest with Bernanke remarks. Bernanke wanted more fiscal support to offset QE, which I totally agree with. More spending in basic infrastructure funded with 10-year bonds at less than 2%. The repayment would come from GDP growth and some higher taxes down the road. All genuine. But the Congress these guys support didn’t act, so more QE was necessary and now we have a real issue with unknown consequences to unwind the experiment.

  30. louiswi says:

    Thanks Barry, a terrific post!!
    No comment to add but it is important to note the signatures on the original letter. A gang of “ass clowns”-your words- of the highest order!

  31. rgod8855 says:

    Just look at the timing – the midterms that overhauled the House was a scant two weeks prior to the letter. Coincidence? I think not.

  32. gman says:

    Wow, great post! Hmm..many of those signatures are also on publc letters regarding Iraq! These letters “promised a cake walk and WMDs”. Dead wrong on the two biggest issues of the decade and yet are still treated as great wiseman in media?

    Why is that ?

  33. victor says:

    Currency debasement since 2010: US $ has been flat against the Euro which is propped up only by Germany and Holland ’cause they care about their deficits. US $ has been down against China’s currency; Japan is special, she has taken debasement to a new level. To me that’s debasement (slight as it is) ameliorated by low/negative Fed imposed oppression like short interest rates. The $ is also helped by our better than expected economic growth including our on going weaning from petroleum imports. Inflation since 2010: price of goods and services are going up at least for the little guy whose income has been stagnant (thus going down) but boy! pretty peoples’ income are booming, ’cause they’re so close to the mother of all teats. BTW when Clinton increased taxes in the early 90′ies, the sky was going to fall, ditto after the repealing of Bush’s taxes for the rich and (so far) no evidence of the dire predictions in the aftermath of the sequester and Gov S/D. Like Bill Gross said: the US Treasury has been in stealth default via: currency debasement, inflation and oppressing low/negative interest rates. How long can this go on?

  34. wally says:

    “…we do not think they will achieve the Fed’s objective of promoting employment.”
    Dead wrong about inflation, it is true. But dead right about the Fed’s effect on employment. Bernanke himself has pointed out that fiscal policy is the correct tool for that.

    • Really?

      Are you suggesting that Unemployment would have been the same or even close without QE?

      • commchf says:

        If stock prices were depressed right now the Fortune 500 would be doing massive layoffs.

        There are those who cannot see Barry.

    • 873450 says:

      Bernanke is saying Congress fiscal policy, not Fed monetary policy, determines employment quality. The overwhelming majority of low-pay jobs created is transforming a once thriving, now hollowed out middle class into a massive working poor population unable to advance, never holding secure employment, always losing ground, always on the verge of losing everything. The collapsing American living standard is an affirmative Congressional policy choice.

  35. gman says:

    “How long can this go on”?

    The 10yr was below 3% for 20+yrs!!..we are only on a handful this time around.

    From 1933 until the late 1950s the 10yr was below 3% including an period where is was just “set” at 1.75%!

    Almost all media coverage of this implies that we are in “unprecedented territory” and it “cannot go on for long” with regard to rates. Like much of what you read or here in the media (Barry not included) FLAT OUT WRONG!

  36. MikeDonnelly says:

    The same people who think experts can make a prediction years ago and have part of it come out correct in the distant future are the same folks that think a law passed in the 1970s caused the Great Recession in 2008

  37. commchf says:

    The craziest thing is you can line up another hundred and get them to sign the same letter with today’s date on it.

    This is derpitude. Let’s start calling a derp a derp.

  38. 873450 says:

    Michael J. Boskin
    Hoover Institution, Stanford University

    Talk about hitching your wagon to a blind horse refusing to drink water for 85 years.

  39. [...] years ago (HT Barry Ritholtz), just after the FED announced QE2, Ben Bernanke received an open letter, signed by respected [...]

  40. [...] almost exclusively bought and sold short-term debt. The program has long been criticized, first by those who feared inflation, and now by those who say its stoking financial instability. But Bernanke is defending the [...]

  41. [...] an example, have a look at this letter published exactly three years ago, signed by a long list of economic wise men and politically [...]

  42. [...] joins Real Economists like Barry Ritholz and Paul Krugman in wondering how the E21 signatories can eat all that crow, and leave that mess of [...]

  43. [...] Barry Ritholtz offers this observation: [...]

  44. [...] inflation…thought I’d bring this recent piece from Barry Ritholtz to the tank. In 2010 Reminder: QE = Currency Debasement and Inflation he points to the long and (then) distinguished list of “experts” who wrote to the Fed [...]

  45. [...] and in disagreement with Mr. Asness, on matters of economics, politics, and central bankers. (See QE = Currency Debasement and Inflation). However, in his list of peeves, I found myself in utter agreement on the question of whether or [...]

  46. [...] that’s what some people say. They’re called monetarists. And they’ve been warning that the Fed’s bond-buying programs would lead to really [...]