As news of the Fed's announcement last week to buy $600 billion in U.S. government bonds is ingested, we have seen a lot of reaction to this plan throughout the planet. Today, there is a story of one of the Fed governors, Kevin Warsh, who is now questioning the Fed plan. Of course, he voted for the program, so it doesn't mean much now. There was only one Fed official, Thomas Hoenig, who voted against the measure.
In other news, Obama is in India right now and he spoke about the Fed plan. When asked about international worry, he said that the Fed program would jump start the American economy and that that benefits other countries. There is no polite way to say this, but Obama is an idiot when it comes to economics. He has absolutely no clue and he has surrounded himself with Marxists and Keynesians, if there is a difference. He believes that the government is the answer to all of our problems and he has no concept of how the free market works.
Meanwhile, criticism is growing from the international community. Politicians from other countries are warning of consequences of the Fed plan. Some of these warnings are accurate and well-founded. Others are pure politics. It's not to say that the accurate ones aren't playing politics, but at least they are right in what they are saying.
It is amazing how powerful the internet is. It is also amazing how much of an affect Ron Paul has had, along with the other libertarians of the world. There is a lot of criticism of the Fed that wouldn't have existed 10 years ago. There are a lot of people warning about the possible consequences of QE2 and how it may trigger inflation (QE2 itself is inflation, but we'll cut them a break and assume they mean price inflation).
Tomorrow, I'll discuss some easy ways to hedge against possible price inflation. While there is no guarantee, it seems that much higher prices are looking more and more likely in our future.