Timothy Day Responds to Economic Risks Posed by Easy Money Resolutions

Philadelphia, Pennsylvania (PRWEB) January 16, 2013

According to a recent article from Forbes, recent decisions from the Federal Reserve could stand to impair the overall state of the American economy, especially the risk presented if the government decided to inject money into the market. While the Federal Reserve has yet to resort to helicopter money, many believe that the threat of its introduction is present. The article reports one decision that hints at this result, In entering its fourth round of quantitative easing, the Fed will buy $ 85 billion worth of mortgage backed securities and longer-term Treasuries per month until expected inflation reaches 2.5 percent, or unemployment falls to 6.5 percent. The Feds macroeconomic models predict those thresholds wont be reached until mid-2015. Economist and financial expert Timothy Day explains why this move would not only prove damaging to the United States economy, but would also gain a reverse affect from citizens impacted with the new streams of money.

The article explains that the Federal Reserve could end up making the decision to use the printing press to stimulate the economy by directly injecting new money into the spending stream without relying on lower interest rates and the financial system. While this decision may be made in order to encourage employment and restore economic confidence, Timothy Day notes that this will most likely not be the case. Following a similar sentiment, the article states, There is no evidence that easy money reduces unemployment or promotes long-run growth; but there is abundant evidence that excess money growth creates inflation and increases unemployment. As evidence, Forbes refers to a helicopter drop experiment that occurred in Zimbabwe and failed only to result in to the loss of personal and economic freedom following hyperinflation.

Having assessed multiple economic patterns through his career, Timothy Day asserts his lack of faith in the direction the Federal Reserve is pointed. He concludes with evidence, The Federal Reserves mistaken belief that it can induce banks to increase lending, and persuade consumers and business to increase spending through its unprecedented expansion of the monetary base is founded on the false premise that it can outsmart the collective wisdom of the markets. To the contrary, market participants fully understand that the $ 3.0 trillion dollar expansion of the monetary base must ultimately be followed by a comparable contraction in the base in future years in order to avoid massive inflation. The vast uncertainty that the Feds misguided policy creates is causing banks, businesses, and consumers alike to hoard any increases in available cash balances rather than put them to productive uses. As a result, the economy continues to languish despite the Feds attempts to revive it.


Timothy Day is a talented professional who has filled many roles within the professional world of finance and economics. As a respected individual within his career field, he is accomplished as an accountant, manager, transfer pricing economist and educator. Timothy Day has also provided extensive economic knowledge and support in relation to legal matters, multinational projects, and comprehensive financial analyses.

Tags: , , , , , , ,

Comments are closed.

CIGI Experts Outline Prescriptions for Cannes Summit and Beyond in Special Report on G20 Issues

Waterloo, Ont. (PRWEB) October 20, 2011 With a possible euro zone collapse and Greek insolvency likely to dominate the upcoming [...]

Pathways Home Health and Hospice Satu Johal Receives CFO of Year of the Year Award; Silicon Valley Business Journal Honoree

Sunnyvale, California (PRWEB) December 02, 2011 Satu Johal, CFO at Pathways Home Health & Hospice, received the Silicon Valley Business [...]

Latest Financial Regulation News

Working Together Towards Better Financial Regulation and Stability in Asia Image by Asian Development Bank Tellers attend to clients in [...]

European financial regulation – 4 questions to Olivier Garnier (Societe Generale)

Olivier Garnier, Chief economist at Societe Generale Group, expresses his view on European financial regulation and its reform. Video interview [...]

AMS Health Care Mortgage Corporation Provides Debt Service Savings to Hospitals Utilizing FHA 242 Mortgage Insurance Program

Jacksonville, FL (PRWEB) August 30, 2013 An oft-overlook and relatively unknown federal program for hospitals seeking capital for needed and [...]

Vermont’s Captive Insurance Industry Off to Best Start Since 2005

Montpelier, VT (PRWEB) April 16, 2012 First quarter licensure of new captive insurance companies is off to a strong start [...]