Within the next year the US is going to see inflation coming back
Based on what I've been reading, I disagree with this. Want to make a bet? ;)
"What I've been reading", incidentally, is the blog of that arch-Keynesian Paul Krugman, who did, in fact, see the housing market collapse coming. And you disagree with Paul Krugman at your peril.
and that ass Bernanke is actually going to think it's a good thing!
It would be, considering that we're in a liquidity trap right now: the Federal Reserve can't lower nominal interest rates any more because they're basically zero. The only way they can lower real interest rates is to push them negative by promising that there will be more inflation in the future.
(And yes, hyperinflation is bad, but we're in no danger of that.)
"What I've been reading", incidentally, is the blog of that arch-Keynesian Paul Krugman, who did, in fact, see the housing market collapse coming.
He didn't just see it coming, he spent the years of 2001-2003 calling for the record low interest rates with the goal of causing the housing bubble!
...To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasd
Some time ago, I had a talk with my father where I explained to him the concept of the broken window fallacy. The idea was completely novel to him, and while it didn't take long for him to grasp the principles, he still needed my help in coming up with examples of ways that it applies to the market in the real world.
My father has an MBA from Columbia University and has held VP positions at multiple marketing firms.
I am not remotely expert on economics; I do not even consider myself an aficionado. But it has frequently been my observation that not just average citizens, but people whose positions have given them every reason to learn and use the information, are critically ignorant of basic economic principles. It feels like watching engineers try to produce functional designs based on Aristotelian physics. You cannot rationally pursue self interest when your map does not correspond to the territory.
I suppose the worst thing for me to hear at this point is that there is some reason with which I am not yet familiar which prevents this from having grand scale detrimental effects on the economy, since it would imply that businesses cannot be made more sane by the increased dissemination of basic economic information. Otherwise, this seems like a fairly important avenue to address, since the basic standards for economic education, in educated businesspeople and the general public, are so low that I doubt the educational system has even begun to climb the slope of diminishing returns on effort invested into it.