Friday, December 14, 2007
An honest and damning appraisal of the credit crunch
In response to the credit crunch, caused by a prolonged period of freely available, cut-price debt, British, American, European, Canadian and Swiss central banks knew precisely what needed to be done: offer the market even more; pump liquidity into the system; hose it down with readies. In short, welcome back Easy Money.
Mervyn King warned against this approach back in August. Now it seems he's fine with it. Worried? We should be.