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November 21, 2010
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I just read this article in which Treasury Secretary Timothy Geithner was quoted saying  “It is very important to keep politics out of monetary policy.  You want to be very careful not to take steps that hurt our credibility.” as a warning to Republicans who are criticizing the Fed’s plan to print 600 billion dollars to buy Treasury bonds.

Yes.  You read that correctly.  The Treasury wants to loan itself 600 billion dollars to buy Treasury bonds from itself. And the Treasury Secretary is warning our representatives in Congress not to try to stop it.

The net effect is an instantaneous inflation of the US Dollar by 600 billion dollars.  That action alone will hurt our credibility.

If political opposition to Monetary Policy is inappropriate when our Monetary Policy is the foolish manipulation of our currency, when is it appropriate?

Welcome to Crazy Town.

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