The Fed Got Everybody Drunk on Cheap Money But the Party Is Over
A lot of people seem to think that if the Fed had just started fighting inflation a little earlier, we wouldn’t have seen the rapidly rising prices that continue today. The mistake, they say, was thinking inflation was transitory. But as Peter Schiff has pointed out, this problem didn’t start last year, or even with the pandemic. This problem was decades in the making.
And at the root of the problem was year after year of easy money. Wall Street was drunk on cheap money for a decade and it is ultimately going to end in another financial crisis.
The severity of malinvestments, of the misallocations of resources, of the monumental mistakes that have been made throughout this economy by the government, the private sector, corporations, individuals — everybody has made mistakes because of this cheap money.”
Just look at the federal government. It has added trillions of dollars to the national debt over the last decade. It recently eclipsed $31 trillion. A year ago, Janet Yellen was saying the big debt wasn’t a problem because interest rates were low. Well, they’re not low anymore. This is a perfect example of how cheap money incentivized bad decision-making.
After the 2008 financial crisis, George Bush
Article from LewRockwell