Drinking The Poison

Bloomberg reports:
"Federal Reserve Chairman Ben S. Bernanke is prescribing 'poison' to the US economy by keeping interest rates near zero and fueling a wave of speculative capital that may cause the next global crisis, former Morgan Stanley chief Asian economist Andy Xie said. Bernanke is making decisions based on 'marginal considerations' that will help short-term growth and employment, instead of focusing on the 'soundness of the system,' Xie wrote in an e-mailed note. The next worldwide crisis will probably strike in 2012, driven by inflation as the low cost of borrowing spurs increases in asset prices, he said. 'There is a Chinese saying that one could quench the thirst by drinking poison,' said Xie, who predicted in September 2006 that the US economy would fall into a recession in 2008. 'Bernanke seems to be prescribing exactly this to the US economy. The slower Bernanke raises interest rates, the bigger the next crisis.' "

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