Moon Kil Woong

Less Negativity, More Inflation

Inflation or deflation do not stimulate or supress a market. What the Fed is suppose to do is create an environment of price stability so people in the economy can make rational choices. By them participating in manipulating the market for economic growth regardless of inflation/deflation they set a very dangerous course. You can not really call that free market economics.

Although everyone is a Keynsian right now, economic stimulus only works after the deleveraging takes place. Otherwise you just prolong the deleveraging and delay the recovery. This is a job to be determined by our elected officials, not the Fed or even the Treasury. Especially when they choose to operate without adequate transparency or disclosure and refuse to do what they have been authorized by congress to do. If they were any other branch, they would be indicted for fraud (misappropriating of public assets). Perhaps congress should consider it. After all Paulson basically spit in the face of those who voted for the bailout.

Personally, as a fiscal conservative, I was always against it. You prime the pump only after the economy reaches the bottom and there is not adequate natural simulus to get it moving again. Hopefully, the Democrats will be more fiscally prudent that spend and spend Bush Republicans. That's why they deserve to get booted out of office for good.