Economic Insights – October 2012

Just over 30 years ago, Paul Volcker launched a monumental monetary effort to bring down inflation.  As Fed chairman, he sold bonds, removed cash from the economy, and let interest rates rise.  And, Larry Kudlow reminds us, it worked. 

Gold plunged, the dollar soared, and the drop-off in bank reserves and money extinguished the plague of inflation that dominated the prior decade.  More importantly, it launched a multi-decade period of very low inflation and healthy growth. 

In mid-September, Ben Bernanke embarked on the absolute.....