Smith Faculty Opinion Article
The 30 Seconds Outlook
November 1, 2010
“What would be your winning formula today? . . . “Pro-growth tax
policies, stable exchange rates.”
— Professor Robert Mundell, in Judy Shelton, Wall Street Journal, October
The Fed favors a second round of Quantitative Easing to lower real interest
rates in hopes of stimulating loan demand and consumer spending.
With the Fed’s Quantitative Easing apparently on the way, this is a good time
to see what historical research and experience has to say about this and other
monetary policy issues:
The real motive for additional easing is to provide cover for another
“backdoor bank bailout” that includes Fed purchases of “toxic assets”
(mortgage-backed securities) at above market prices.
John A. Haslem