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News Link • Economy - Economics USA

4 Reasons Why Bernanke Will Refuse to Fight Inflation

• Daily Reckoning
Inflation’s unlikely to keep at bay much longer. To date, banks have been hoarding new money pumped into the system as excess reserves (to protect themselves against grotesque losses like the $7.6 billion Citigroup reported losing last quarter). However, banks will again begin to lend once they feel there’s room to maneuver, and the resulting burst of growth in the money supply will lead to rapid inflation.
Recently, accepting this likelihood, Harvard economics professor Gregory Mankiw outlined three reasons why Bernanke’s still going to refuse to fight inflation.
 
 
 

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