“Obama’s Gorbachev moment”

A must-read piece from Simon Johnson and Peter Boone.

Unfortunately, the current policy of low short-term interest rates — which helped break the financial panic — now feeds our bad financial habit. Anyone still creditworthy can take out a low-interest rate loan in American dollars and make money buying assets overseas. Stand by for another financial bubble masquerading as a “shift in fundamentals” — probably someone will soon try to sell you on “China rising” or a broader “new emerging market model.”