A link to my column in the Huffington Post yesterday on the need to end national pay bargaining Link. This follows a letter on the issue which I signed and was published in the Times yesterday.

Yep predictable as hell Ben Bernanke is back to the printing press again...the guy is like a herion addict except he is addicted to printing cash. In the short run the market loves it but one thing for sure is that this is going to end very badly, continued fiscal deficits, moral hazard, bond market bubble, the robbing of savers....thanks a lot Ben. Lets be honest about this, the real reason for all this printing of money is to monetize the US national debt not to boost the economy. All the Bernanke waffle is just talk to try and con people, there is no Exit  strategy and no intention to exit whatever he says. My view is that when the bond market bubble bursts he is going to be viewed as even worse than Alan Greenspan some legacy! Here is a link to a very good paper by William White of the Dallas Fed that looks at the negative side of Quantitative Easing "Ultra Easy Monetary Policy and the Law of Unintended Consequences"

Quantitative Easing can only do so much magic..the global economy is showing unmistakeable signs of a synchronized slowdown - profits are at record highs despite the low economic growth and there is only so much cost cutting firms can do. A link to some nice charts showing some worrying traits. Link

There is a lot of debate about the effects of Quantitative Easing in particular whether it is good or bad for the economy and also precisely on the channels through which it influences the economy. At the end of the day, we need to have a much longer perspective, we cannot in my view judge the full effects of the QE without a decade of data. The short run effects seem to be to keep longer term interest rates low and therefore provide positive effects on investment and help to boost the stockmarket and other forms of risky investments. It is, however ,the longer term effects that worry me...it means risk gets mispriced and governments continue to borrow too much and so the long term effects are the creation of new bubbles in the economy which of course always pop. Here is a nice link to to some commentary on a paper by Michael Woodford on the topic. link