Kaufman is Not Impressed by Fed’s Policy Stance

Economist Henry Kaufman is Not Impressed by Fed’s Policy Stance

http://online.wsj.com/article/SB10001424052702304410504575560302444820376.html

Kaufman Notes:

“Now that an inflationary bias will be introduced in monetary policy, market and economic uncertainty will heighten. How long will the Fed allow inflation to breach the 2% level before it pulls back on the monetary reins? Will the breach be allowed for one or two quarters or longer? Suppose the unemployment rate falls to 8.5% but the inflation rate reaches 3%. What then?

At a minimum, the new Fed approach will increase financial markets' volatility. For the near term, a new quantitative easing action as is now generally anticipated will most likely require much larger purchases of longer-term government bonds as the market evaluates the longer-term negative implications of the Fed's new monetary approach”.

On a Lighter Note, The Onion's Take on Loose Monetary Policy is Excellent:
http://www.theonion.com/articles/us-economy-grinds-to-halt-as-nation-realizes-money,2912/  

UPDATE:

Is the Federal Reserve Manipulating the Dollar Exchange Rate?

http://www.bloomberg.com/news/print/2010-10-23/germany-says-u-s-federal-reserve-heading-wrong-way-with-monetary-easing.html

According to German Economy Minister, Rainer Bruederle,:

“Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate”