International Investing

The ending isn’t pretty:

The Fed is doing everything it can to stave off disaster, but frankly, it is not rich enough. With assets of about $800 billion, having instituted $400 billion of rescue programs in the last two weeks, a $30 billion loan backing J.P. Morgan’s takeover of Bear Stearns and a commitment to offer “unlimited” credit to other broker-dealers for the next six months, it is pretty nearly tapped out. It does of course have available a further source of liquidity, the federal printing press. With inflation already moving at a brisk trot, use of that source will replace an incipient recession with a deeper and highly inflationary one.