Comments on: QUEASY — QUantitative Easing Aids Speculators Yields http://alephblog.com/2009/09/16/queasy-quantitative-easing-aids-speculators-yields/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Mon, 15 Mar 2010 13:59:17 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: maynardGkeynes http://alephblog.com/2009/09/16/queasy-quantitative-easing-aids-speculators-yields/comment-page-1/#comment-23310 maynardGkeynes Thu, 17 Sep 2009 13:38:53 +0000 http://alephblog.com/?p=2015#comment-23310 David, this an insightful take. Thanks for expressing it so well. David, this an insightful take. Thanks for expressing it so well.

]]> By: But What do I Know? http://alephblog.com/2009/09/16/queasy-quantitative-easing-aids-speculators-yields/comment-page-1/#comment-23307 But What do I Know? Wed, 16 Sep 2009 19:51:59 +0000 http://alephblog.com/?p=2015#comment-23307 Well put, David. I used to think the Fed was either stupid or corrupt, but now I'm beginning to think that they are just bureaucrats afraid to do anything different that they can be blamed for. It's the equivalent of a portfolio manager buying IBM--nobody ever got fired for buying IBM. No one at the Fed ever got fired for lowering interest rates--when it blows up again they can throw up their hands and say they did the best they could--or that they could fix the problem this time if only they were given more authority. On the other hand, if they lean against the speculation, they will be blamed for "stunting the recovery" or worse. In Bernancke's mind I'm sure there is nothing worse than repeating the tightening of 1937--he spend his whole career fighting a war as out of date as the cavalry-breakout obsessed generals of World War I. The only tragedy is the damage his "leadership" will cause. Well put, David. I used to think the Fed was either stupid or corrupt, but now I’m beginning to think that they are just bureaucrats afraid to do anything different that they can be blamed for. It’s the equivalent of a portfolio manager buying IBM–nobody ever got fired for buying IBM. No one at the Fed ever got fired for lowering interest rates–when it blows up again they can throw up their hands and say they did the best they could–or that they could fix the problem this time if only they were given more authority.

On the other hand, if they lean against the speculation, they will be blamed for “stunting the recovery” or worse. In Bernancke’s mind I’m sure there is nothing worse than repeating the tightening of 1937–he spend his whole career fighting a war as out of date as the cavalry-breakout obsessed generals of World War I. The only tragedy is the damage his “leadership” will cause.

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