Fearmongering about the risk of looming hyperinflation is exactly what the Fed wants. "The major danger with a zero lower bound for the interest rate," Swedish policy-wonk Lars Svensson says (.pdf), "is that inflation expectations will be too low and even negative, and that the real interest rate will thus become too high."
July 3, 2009
Fearmongering about the risk of looming hyperinflation is exactly what the Fed wants. “The major danger with a zero lower bound for the interest rate,” Swedish policy-wonk Lars Svensson says (.pdf), “is that inflation expectations will be too low and even negative, and that the real interest rate will thus become too high.” 
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