Who Said This and When? Do You Agree?

June 29, 2012

by Jerry O’Driscoll

“Why is easy monetary policy such a sin? Because in such an environment, loans are cheap and borrowers can finance every project that they dream up. This results in excesses, and also increases the severity of the recession that inevitably follows when the bubble bursts.”

7 Responses to “Who Said This and When? Do You Agree?”

  1. Roger McKinney Says:

    Anna Schwartz?

    The statement shows why many people think the size of the preceding boom gives a clue as to the depths of the recession.

  2. Steven Koukios Says:

    Milton Friedman, correct?


  3. Anna J. Schwartz, July 25, 2009 http://nyti.ms/LWhyFC I agree. Kind regards from Bolivia.

  4. Allan Walstad Says:

    Well, I’d want to unpack the word “excesses.” Also, reading Schwartz’s op-ed, she’s saying Bernanke did a poor job, but give us the right Fed chair and things could be ok. Doubtful, in my opinion.

  5. Cody Ourqiue Says:

    Anna J. Schwartz

    I do agree that with easy monetary policy, there becomes abuse of the system and there is not enough regulation to separate the wasteful with the beneficial. The excess amount of investments would create a build up of and when the bubble does eventually burst, the severity of the recession would be multiplied. For example, if college students graduated and wanted to borrow money from lenders simply to create their “dream project/business” and a recession led them to be less profitable, the severity of the recession would increase due to all of the failing projects/businesses.

    I believe that a strict monetary policy may not be ideal for many of the poorer individuals, but it is necessary in order to keep stability and a healthy economy from getting progressively worse.

  6. Mario Rizzo Says:

    On the dangers of easy monetary policy see the latest report from the Bank for International Settlements:

    http://www.bis.org/publ/arpdf/ar2012e.htm

  7. NevadaWolfPack Says:

    Are you inferring that a Las Vegas stripper that owns 7 houses could contribute to a housing bubble?

    “History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.” –??????????


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