The Bloomberg editorial below (representing the official view of the Bloomberg organization and therefore the views of its owner, Mayor Bloomberg) demands more Federal Reserve money printing. What is the Fed waiting for, the article rhetorically demands.
Note that the efficacy of money printing is just assumed. No argument is offered for why it will work. Not an instant is spent answering the objection from many that this very policy is the cause of the present predicament and the cause cannot be the cure.
The last two decades have created a massive debt bubble. Massive lending has taken place that cannot be repaid. Who has furnished the liquidity to create this situation? The Fed of course and other central banks. Shouldn’t Bloomberg take at least a moment to explain why its editorial board thinks that what has gotten us into this, if increased, will get us out of it?
Despite the puerility of the editorial, it does have a certain honesty. The game plan of the Fed and other central banks is to inflate away the old debts on a tide of new money but do it gradually enough not to set off alarms among pillaged savers, which could set off an out-of-control inflation in consumer goods as well as investment assets. The editorial in effect urges the Fed to accelerate what it is clearly set on doing anyway.
Whether all this will create a depression or a hyper-inflation is hard to say. But what it cannot give us is a sound economy with the right relationships between prices and costs that ensures profitability and thus jobs.