We’re headed toward stagnation – unless the Fed reins in its money printing

Mises Institute/Frank Shostak

photo of $100 bills rolling off the printing press at the Bureau of Engraving and Printing“According to most experts, when an economy falls into a recession the central bank can pull it out of the slump by pumping money. This way of thinking implies that money pumping can somehow grow the economy. The question is, How is this possible? After all, if money pumping can grow the economy, then why not pump plenty of it to generate massive economic growth? By doing that central banks worldwide could have already created everlasting prosperity on the planet.”

USAGOLD note:  Some simple, straightforward logic and a point well-taken from Applied Austrian School Economics’ Frank Shostak ……  It is the adverse consequences to putting on the monetary brakes that worries the Fed, the White House and Wall Street and that is the main motivation for keeping the monetary printing presses rolling. Shostak recommends the opposite, but few believe that will happen anytime soon.

Repost from 9-9-2020

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