In an uncannily prescient speech in 2002 (Deflation: Making Sure It Doesn’t Happen Here), he laid out a detailed plan for avoiding deflation in a western economy. This involved printing money to bail out failing banks, and buying troubled assets such as mortgage-backed securities. If necessary (and we are not quite there yet, in my opinion), he advocates printing more money to finance an increase in the budget deficit and pay directly for tax cuts. That man was Ben Bernanke, now the chairman of the US Federal Reserve. Read his speech on the Fed’s website. So far, about two-thirds of the plan has been implemented, and he clearly stands ready to complete the job if needed.
In Short Ben thinks that hyper Inflation is the last stop. If this happens you can you look at the USA to be the next Iceland.
http://ftalphaville.ft.com/blog/2008/11/10/18038/the-unthinkable-has-happened/
No comments:
Post a Comment