Reflationary Monetary policy

Hard working, frugal men who save by purchasing bonds and holding cash are doomed by central bank's reflationary monetary policy. Inflation will rise and the purchasing power of his saving from frugality will be eroded significantly. It is a sacrifice wasted. Wealth is transferred to the borrower who spend and invest.

Government policy favors investors and consumers. It is especially true with countries that run a big deficit. As an investor you need to watch out for inflation.

FOMC March statement

"Exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."

FOMC, March 20, 2013


“I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said

to read

The Org: The Underlying Logic of the Office - Ray Fisman; Hardcover