By Charles Kadlec
The stage has been set for a surge in the price of oil to more than $100 a barrel. The culprit is not the Organization of Petroleum Exporting Countries, nor China and the developing world’s growing demand for energy–though they will surely be blamed.
While on a United Airlines flight from New York City to Los Angeles this week, a fellow passenger handed me a copy of the The Wall Street Journal Nov. 15 op-ed by Alan Blinder—”In Defense of Ben Bernanke“—and suggested that I write a letter to the editor if I disagreed with the Princeton University professor’s claims. Having read the piece, I told the passenger over my shoulder, “You bet I will.”
Prof. Blinder seems blind to the clear and present dangers of QE2. Instead of seriously discussing these dangers, he takes us on an excursion to a Keynesian utopia, a mythical land in which endless government spending is an amazingly effective job creator and investors’ confidence in U.S. Treasury bonds somehow increases as we sink ever deeper into debt while the Fed has its printing presses working overtime.
By Martin Hutchinson
As long-term US interest rates rise and negative global reactions roll in to the Federal Reserve’s November 3 announcement of a further US$600 billion round of “quantitative easing” purchases of Treasury bonds, aka QE2, one question becomes uppermost to the inquiring mind: even though there’s a huge amount of competition for this title, is it indeed possible that this masterstroke by Fed chairman Ben Bernanke was the most foolish economic policy move ever?
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