Tuesday, December 16, 2008

I Think [We're] Turning Japanese

Welcome to ZIRP.

What worries me is what will interest rates do when (if?) we finally rescue the economy enough that this huge new money supply starts driving a big inflation problem. This will not be fun, and will probably just get worse before it gets better. I would also argue that we're never going to have an economy with the huge booms and consumption that we've seen the last 20 years. Hopefully that just means steady growth and shorter busts rather than something like no growth and spiraling problems into the future.


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