Since people are not spending money, or something, Bernanke has determined that we need more of it floating about. This is the third wave of so-called quantitative easing. Waves 1 and 2 were insufficient, so now we have 3–and we are not setting particular limits this time.
Oh, and interest rates will be kept low through 2015. One problem with that, though. Bernanke has no way of guaranteeing that he’ll be the head of the Federal Reserve at that time. So this is one of those promises which falls in the same category as one Congress promising that the next one will do or not do X.
It occurs to me that by adding yet more dollars to the money supply, we are providing additional morphine to a patient who is in great pain. We are not attempting to figure what is causing the pain and address it. We are not going to do anything about the obvious broken bones and tissue trauma. No, we are simply going to crank up the morphine.
Then, when the morphine doesn’t cut it anymore, the patient will be far worse off then when we started, since the underlying issues will have grown worse through lack of care.