Nassim Taleb, distinguised professor at NYU and author of The Black Swan, was on Bloomberg TV today blasting Bernanke for not understanding the risks he is taking by doing QE2.
He says QE2 is like being short on an out of money option on hyperinflation, meaning, you are in very deep trouble if it happens.
Who will bear this risk? Retirees.
The Feds' business seems to be "price instability".
This is his latest book. The title is a reference to Procrustes, a Greek who given a bed for his guests, would cut the guests's legs if they were too big, or stretch them if they were too short, an allusion to what the Fed is doing, as opposed to fixing what is really wrong: