Krugman: Rule by Rentiers; no it is rule by paper hangers

Do anything to create jobs and interest rates will soar, runaway inflation will break out, and so on. But these risks keep not materializing. Interest rates remain near historic lows, while inflation outside the price of oil — which is determined by world markets and events, not U.S. policy — remains low.

Interest rates are low because the Fed is buying bonds.  In fact, they are buying 85% of the bonds. This means almost nobody else is buying the bonds but the Fed.  This is causing the Chinese and PIMCO to drop out of the bond market at short term maturities.

The Chinese decided to go longer term, with what they believe to be a better deal for themselves.  What does that tell you?  Nobody is buying bonds because of the Fed's intervention is distorting the markets.  Interest rates are too low.  Quantitative easing will indeed lead to inflation if this continues long enough.  All paper money regimes have failed throughout history for this very same reason.  Unless this is stopped, we are now witnessing the very process that will bring it about.

Inflation isn't occuring?  Only in Krugman's dreams.  Prices are going up, but it is being hidden from view.  If the same method of accounting for inflation as was used in the past was still being used today, the official inflation rate would be much higher.  People know that the actual inflation rate is higher than what the government is reporting.  All Krugman is doing is repeating the same fairy tale that the government continues to report.

They think they are fooling everybody, but they are only fooling the people they need to fool.  After all, you only need half in order to win elections.

As for higher oil prices, I had a post that quoted the Energy Secretary who said higher prices were government policy.  So, Krugman is wrong again. External events are not the cause, the cause is within.

Blaming others does not address the problem.  It only avoids the cause of the problem.

Adding more debt and spending more money will get no better results than what has already occurred.  That would be the best case result.  The worst case result would be yet a higher rate of inflation than what already exists.  But to Krugman, this isn't the problem.

To him, the bigger problem is getting Democrats elected.  In the meantime, the financial integrity of the economy is being sacrificed for political gain.  That is what Krugman and his liberal pals are really after.