A wild debate has broken out at the WSJ blog concerning whether borrowings from the Fed’s new Term Auction Facility is or isn’t inflationary. The background is that since December, non-borrowed bank reserves have plummeted while borrowings from the Fed’s TAF have soared. The debate concerns what all this means. Mark Thornton will offer his analysis on Monday.
Source link: http://blog.mises.org/7859/the-taf-frenzy/
The TAF frenzy
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Maybe I’m misinformed and haven’t studied enough to ask this question but. . . How is it not inflationary?
When you think, as Ben Bernanke seems to, that high energy prices somehow cause inflation, it’s pretty hard to draw any link between Fed policy and inflation. It’s ridiculous, and the so-called economics reporters at the various media outlets don’t know any better.
If the fed is simply printing the money that they are lending…then by definition its inflationary. Whats the debate about?
“What’s the debate about?”
over, whether or not, the FedRes Head can come out and say that he’s actively ripping off U$D holders for the benefit of his pet banks and high-spending politico-friendz…
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