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Paul Volcker, the former chairman of the US Federal Reserve,
has warned that the economic slump has begun to metastasise

Paul Volcker
"There has been leveraging in the economy beyond imagination, and nobody was saying we need to do something,"
"There are cycles in human nature and it is up to regulators to moderate these excesses.
Alan was not a big regulator."
Ambrose Evans-Pritchard, Daily Telegraph, 17 Nov 2008

Mr Volcker is a towering figure in the US, praised for taming the great inflation of the late 1970s with unpopular monetary rigour. He is no friend of Alan Greenspan, who replaced him at the Fed and presided over credit excess that pushed private debt to 300pc of GDP.

The arch-culprit was the bonus system that allowed bankers to draw forward "tremendous rewards" before the disastrous consequences of their actions became clear, as well as the new means of credit alchemy that let them slice and dice mortgage debt into packages that disguised risk.

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Det kanske är så att all stabiliseringspolitik omöjliggörs av det som på ekonomspråk kallas "decision lag" - dvs beslutseftersläpning.
Då är det kanske Milton Friedmans stadiga penningmängdstillväxt som är det enda som kan göras i stabiliserande riktning.
I den här krisen är det dock för sent.
Danne Nordling 17/11 2008

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Milton Friedman

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