Murphy Debut "Daily Reckoning" Article
Today my debut article at the Daily Reckoning ran. (They saw my sarcastic doom and gloom at mises.org and thought, “This is our kind of guy!”) The plan right now is that I will contribute columns every month or so. (BTW there are some missing hyperlinks because they just switched to a new format and there were some posting snafus.) In today’s article I make a lot of the same arguments about Bernanke having no options, but I spell some of the issues out more carefully, especially “open market operations.” The conclusion:
The Federal Reserve under Ben Bernanke’s leadership has painted itself into a very tight corner. He has cleverly managed to stave off utter disaster so far, but he is running out of options. Ironically, the effects of his incredible injections of new reserves have been masked simply because the financial sector is still paralyzed. If and when the economy begins to improve, Bernanke will have to decide whether to allow double-digit price inflation or instead contain prices by strangling the incipient recovery.
