Just a quick note to signal to our friends a few interesting articles in financial media. The first is Tony Jackson at the FT with these two useful stories that mirror fairly closely what we have been arguing here, but without the "analysis":
http://www.ft.com/intl/cms/s/0/b4b52e86-ca52-11e0-a0dc-00144feabdc0.html#axzz1VkytLaml (T Jackson on trade and ex-rate imbalances)
http://www.ft.com/intl/cms/s/0/94054032-c669-11e0-bb50-00144feabdc0.html#axzz1V2rAfr2f (T Jackson on Valuations)
The next article is from 'MoneyWatch' where Gertler comments on the "historical" approach of Bernanke at Jackson Hole - something we have pointed out repeatedly on this site
http://www.marketwatch.com/story/bernanke-ready-for-action-but-when-is-in-doubt-2011-08-22?dist=afterbell (Gertler comments on Bernanke)
This next article from a former Reserve Bank of Australia economist I know personally gives a useful summary of the options open to Bernanke. But Grenville, like most other commentators, fails to see what is truly powerful about quantitative easing: the effect it has on the dollar's exchange rate and on exporting inflation to other countries (especially China and Germany and Japan) raising their exchange rates and making US industry more competitive, thus easing the toll on US employment. Another crucial point is that negative real rates on treasuries force capitalists to invest, and higher rates of inflation reduce the real cost of the US debt.
We have stressed these points on this site on many occasions: it is difficult to understand why many "analysts" fail to see them. Tony Jackson's article linked above is a very useful corrective on all this.
Finally, again from 'MarketWatch', this piece by the usually reliable David Marsh - but this time he is wrong about the choice the German elites will make (he says it will be against the euro, to preserve their "efficiency/productivity" - we say he is quite wrong because Germany's elites have no choice but to stick to Europe and the euro)