Handled correctly, that type of growth can become self-sustaining, but monetary policy can help smooth out any bumps along the way.

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He specifically targets the Fed's "unprecedented" policy of sustaining near-zero interest rates and its exercise in money-printing, "Quantitative Easing 2, " that has it buying medium- and longer-term securities from the Treasury.

WSJ: The Weekend Interview with Paul Singer: Mega-Banks and the Next Financial Crisis

To date, inflation expectations appear to have remained reasonably well anchored, but any tendency of inflation expectations to become unmoored or for the Fed's inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and reduce the central bank's policy flexibility to counter shortfalls in growth in the future.

NPR: Economic Swoon to Continue, Bernanke Says