Forbes – Jesse Eisinger, in a provocative article in today’s New York Times, summarizes an argument on Fed policy between hedge fund managers and economists. “After several such managers at a recent conference denounced the aggressive money-printing policies of Ben S. Bernanke . . . the economic blogosphere rose up to mock them.”
According to the author, “Many hedge fund managers have been predicting that high inflation and fleeing creditors would send interest rates skyrocketing.” “And they have been wrong. Those silly hedge fund managers. They don’t understand macroeconomics! As Paul Krugman (and many others) have explained, the lack of demand explains why there isn’t any inflation and why interest rates haven’t risen despite all the money-printing.“
