“The general notion the Fed was propagator of the bubble by monetary policy does not hold up to the evidence. … Everybody missed it — academia, the Federal Reserve, all regulators.” – Why the Mainstream Fails to Understand Recessions – Hal Snarr – Mises Daily

Everybody missed it? Not according to Axel Leijonhufvud. In 2008 he wrote, “Operating an interest-targeting regime keying on the CPI, the Fed was lured into keeping interest rates far too low far too long. The result was inflation of asset prices combined with a general deterioration of credit … a variation on the Austrian overinvestment theme.”[1] Randall Forsyth concurred, writing the following in early 2009, “The Austrians were the ones who could see the seeds of collapse in the successive credit booms, aided and abetted by Fed policies.”[

via Why the Mainstream Fails to Understand Recessions – Hal Snarr – Mises Daily.

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