Mouse clicks get the job of money creation done in this day and age, the Journal points out. Buried in the last two paragraphs of the piece is the point I’ve been making again and again this week against a gale of “we’ll need a wheelbarrow full of dollars to buy a loaf of bread” nonsense…
“It is only if the banking system starts to expand credit that you get higher spending and inflation,” says Ethan Harris, an economist with Barclays Capital.
Officials hope the new money gets more credit into the economy and helps to revive the financial system. If all goes according to plan, Fed officials will pull the extra money during a recovery, pushing interest rates higher before inflation gets out of hand.
