Inflation Hawk

Monetary policy makers in Washington are worried about rising consumer price index when the real threat is deflation or worst,stagflation.Despite Fed's Quantitative easing,the economy still looks gloomy.I agree that Quantitative easing can lift the economy from near recession,but the stimulas was so little that its not making any big impact on the economy. So,will Quantitative easing can help the economy in the long run? Yes,certainly.According to Prof.Christina Romer,QE2 may push down the long term interest rate which encourages spending.The real cost of borrowing will be much lower,making domestic assets less attractive,bypassing the dollars and lowering the currency's value in the foreign exchange market.As a result,there will be less imports and more exports,and most importantly,massive job creation.Yes,due to volatility in commodity prices,Inflation will pop up for a short period and that can be controlled through an effective monetary policy.