Sayeth the Dallas Fed President:
"We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid…"
"Inflation is a sinister beast that, if uncaged, devours savings, erodes consumers’ purchasing power, decimates returns on capital, undermines the reliability of financial accounting, distracts the attention of corporate management, undercuts employment growth and real wages, and debases the currency."
Fisher has been battling his "8th inning" comments about tightening for several years now. He seems to have put down the pompoms and is seriously discussing what I suspect he understood all along: Inflation is an ever present –and growing — threat.
Hat tip: Fleck
The Longest 8th Inning in the History of Baseball (June 2006) http://bigpicture.typepad.com/comments/2006/02/the_longest_8th.html
Storms on the Horizon
Richard W. Fisher
Remarks before the Commonwealth Club of California
San Francisco, California, May 28, 2008