Last week, the Federal Reserve announced it would engage in bond buying in a new effort to stimulate the economy.  Officially, this is “QE3,” or the third round of “quantitative easing.”

What that means is that the Fed will increase the money supply in order to drive down interest rates and make it easier for Americans to borrow and spend. For QE3, the Fed said it would buy $40 billion of bonds a month of indefinitely. And that’s on top of an additional $45 billion a month the Fed is spending on another program to stimulate the economy (it will continue to do this until the end of 2012.)

But let’s be honest: there are both ethical and practical problems involved with expanding the money supply. Most people don’t think about the ethics of inflation, but it’s our duty as Christians to recognize the ethical implications of our central bank’s economic actions. [Read more...]