1. Inflation expectations are running 60bps below target
2. The real interest rate is negative (yes negative) right now
3. The ten year treasury yield is at 50 year lows....
And the biggest threat to America is...inflation!!!
http://www.reuters.com/article/2012/04/10/usa-fed-fisher-idUSL2E8FABGG20120410
This guy is a Federal Reserve Governor? He seems utterly clueless about what is going on with the economy.
If Uncle Milton were alive I can tell you what he would be counseling us. M*V=P*Y Assuming V is constant, as he did, we need to be pumping money into the economy any way we can. Either inflation will go up - which we can afford right now - or output growth will increase. Most likely some of both will occur - more output at first and more inflation later.
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