Mankiw Says Abandon Inflation Fight, Wants 30% Inflation Over Next 10 Years

When inflation takesoff in the not too distant future as a result of current out of control monetary policy (Three month annualized growth in M2 nsa is now at 17%), look no further than Harvard Professor and best selling economic text author, Greg Mankiw, for egging Ben Bernanke on in his money printing ways.

Mankiw wants the Fed to write this in their next press release:

The Committee recognizes that moderate inflation would be desirable under the present circumstances. In particular, the overall level of prices a decade hence should be about 30 percent higher than the price level today. The committee anticipates keeping the stance of monetary policy sufficiently accomodative to achieve that degree of inflation over the coming decade.

Then he writes this nonsense:

The abandonment of "price stability" would be the modern equivalent of Roosevelt's abandoning the gold standard. Of all the things that Roosevelt did to get the economy out of the Depression, jettisoning the gold standard was the most successful.

FDR's "abandonement" of the gold standard was a big scam. It was a government insider scam to help Bernard Baruch (who was advising FDR) and John Maynard Keynes make huge profits during the depression.

First, FDR confiscated privately held gold from all citizens. Baruch and Keynes then scooped up gold stocks. With all U.S. gold now in Fort Knox, FDR instituted a gold buying scheme that pushed the price of gold higher and higher, and resulted in huge insider profits for Keynes and Baruch.

Yeah, FDR's "abandonment" of the gold standard worked well for schemers Baruch and Keynes, for the average American it has created a situation where there is now no restraint on the Fed's ability to print and print more money.

Books could be written about the errors and complications of calling for a 30% decade of inflation. First, it will cause distortions in the economy, in favor of those who get the money first. Second, its true impact can not be measured without knowing what productivity gains are doing to the price level. Further, Mankiw's proposal could very well result in a rock and roll business cycle during the entire decade, and its ultimate inflationary impact could be much more than 30%, depending where we are in the business cycle and what is happening to productivity.

And, there is no upside to 30% inflation! Helluva a recommendation.