A weaker currency is a national tariff. After we get a weaker currency, we have to take advantage of that. Or else, we will waste it once more in inflation and in the inability to raise competitiveness.
Each money-printing exercise brings about unintended consequences. These unintended consequences are higher inflation rates than had no money been printed.
The underconsumptionist of 1819 believed that consumption would be stimulated by tariffs, while the underconsumptionist of a later day urged monetary expansion as the remedy. On the other hand, the remedy proposed for the shortage of money capital was monetary inflation in 1819, encouragement of savings and thrift in the 1930s.
My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.
If we were to underrun our inflation objective over a period of time that we tried to increase interest rates, I think that would be worrisome.
