According to Fed Chairman Ben Bernanke, pulling back on aggressive policy measures too soon would pose a threat to economic recovery. Our analysis indicates, however, that the sooner the Fed reverses its loose stance the better it is going to be for the underlying fundamentals of the US economy.
A reversal in the current loose stance, while good news for wealth generators, is going to undermine various nonproductive wealth consuming activities. Meanwhile the growth momentum of US commercial bank lending displays a visible weakening.
Read the complete article at The Mises Institute here.
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