Comments (6)

• Frank

  "That [Peter Schiff's], however, is a minority view. Most economists think that inflation is the last thing the Fed needs to worry about right now." Most economists berated Schiff for his predictions, which we've seen come true. Just because a view is in the minority, that doesn't mean it's not accurate. It's the argumentum ad populum fallacy, where a proposition is claimed to be true solely because many people believe it to be true. And Business Week will say it was just making a factual statement rather than expressing bias.

  Published: December 21, 2008 2:52 PM

• Concerned

  Sadly, mainstream media is full of this bull. Here (http://www.nytimes.com/2008/12/01/opinion/01krugman.html), Krugman argues that major deficit spending is no problem.

  Published: December 21, 2008 3:29 PM

• EnlightenmentThinker

  Hahaha the Fed's "shock and awe," as businessweek puts it, is going to do as much good for us as the original shock and awe.

  Published: December 21, 2008 3:48 PM

• Bruce Koerber

  December 21, 2008

  Interest Rate Of Zero Makes U.S. More Unproductive.
  
  An interest rate of zero is absurd! It is like saying production of goods that require time and that won‘t be available until some time in the future are just as valuable as goods that are available right now!

  It is like saying that producers in the U.S. economy do not need to produce goods now. The interest rate is the premium assigned to goods if we have to wait for them. If that premium is zero then we don’t need them now!

  Now take a look at the U.S. economy and see if a zero rate of interest makes any sense. Productive capacity is declining with the bulk of production taking place in other parts of the world and then imported in exchange for dollars. In other words producers in the U.S. are already being diminished by all of the economic intervention. Now these same economic interventionists are sending a signal (interest rate = zero) to producers not to produce goods now.

  This is a devious way for the Federal Reserve to manage price deflation. It is their secretive way of destroying productive capacity to try to prop up prices since the barbaric methods of burning crops and killing livestock as was directed during the New Deal to prop up prices would surely cause a revolution nowadays.

  Deflationary adjustments during the recessionary period liquidates bad debt and adjusts relative prices which has the benefit of causing the currency to appreciate. This is bad news for the biggest debtor in the history of the world!

  The unConstitutional coup is behind the economic terrorism that uses the Federal Reserve to steal from the general populace and to bribe the ego-driven interventionists. It is ultimately the holder of all the welfare/warfare debt and it is behind all the pressure that is being put on its underling named Bernanke to make the interest rate zero.

  The last thing the U.S. economy needs is become less productive!!!
  

  Published: December 21, 2008 5:56 PM

• matth

  "According to New York University economist Mark L. Gertler, who collaborated with Bernanke on research during the Fed chief's Princeton years: "We are in an incredibly dangerous situation. Now is the time to be aggressive. There's no danger of inflation. It's almost insane that people are talking about it now.""

  Someone who tracks these things ought to remember that last statement and remind this guy of it in a few years.

  Published: December 21, 2008 7:33 PM

• Artisan

  Inflation is just a casualty of war...
  Now with the never ending "War against Terror" or the next one "War Against the Evil Itself Within Us" , they could really just close all the central banks of the world and leave the rates to 0%... forever. At least we wouldn't have to listen to those idiotic theories how much "right" it is...
  

  Published: December 22, 2008 6:44 AM