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EconoMeter: Are low interest rates good policy?

Roger Showley, U-T SAN DIEGO

Friday, March 1, 2013

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Kelly Cunningham, National University System
Answer: NO
The Fed’s attempt to re-inflate asset prices and start another consumption boom is leading stock and commodity markets back into financial bubble territory. This artificially created “wealth effect” in order to induce economic growth through a debt-driven consumption spree by the American public is creating another bubble economy that will not end well. In the meantime the Fed does not acknowledge the existence of much worse than reported inflation that is underreported using current government methodologies to measure the Consumer Price Index (CPI). The precise degree to which the dollar is depreciating is therefore a misleading determinant for all other financials.