Like many I was too naive and conveniently forget that it is easy to print money but devilishly hard to take it back. Looking back, it was never realistic and in fact foolhardy for the Fed to have tapered in October.
There was never time to worry about how to soak up the liquidity used to put out the fires in the scary days of the crisis. Realistically this is a problem that is best given as much time to solve as possible. If you can't make it better don't make it worse. On the other hand nobody seems to know if we would have enough time. We simply choose ignore our parlous state. We don't want to see that we might have a lost decade or worse but really that is not enough reasons to be so pessimistic.
What I am very sure of is this: We need to break some rules.
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