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Biggest gamble in world history?
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GGniner Offline
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Post: #1
Biggest gamble in world history?
possibly

http://www.commentarymagazine.com/blogs/...occa/59211

Quote:What is Fed Chairman Ben Bernanke really trying to do? He wants to unfreeze the “credit crunch” that is making it too expensive or even impossible for U.S. consumers and businesses to borrow money, which was the trigger for the current recession. The Fed directly controls only the shortest-term interest rates. But consumer purchases (including mortgages) and business investments are sensitive to longer-term interest rates. QE is the Fed’s way of trying to reduce real interest rates in the 2 to 10-year range of the spectrum.

This is also the biggest experiment in monetary policy in history. Milton Friedman is known for having explained the genesis of the Great Depression in monetary terms. Bernanke, a close student of the early Depression, is determined to prevent the wicked asset deflation of 1930-32 that ruined so many lives. At what cost? Well, the Fed’s balance sheet just grew by $1.15 trillion: it’s now 50% bigger than it was a day ago. That’s a scary amount of inflation.

What no one really knows yet is the exact linkage between the formation of new money, and the formation of new credit. Bernanke and his Fed are gambling that a giant pulse of monetary inflation will reignite private lending. We can only hope they’ve pointed their fire hose at the right problem.

For every lender, there’s a borrower. The Fed will succeed if the problem in credit markets is the reluctance of lenders to write new loans. But if the problem turns out to be a lack of demand for credit, then all we’ll get out of this is stagflation.
(This post was last modified: 03-20-2009 02:28 PM by GGniner.)
03-20-2009 02:27 PM
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Tripster Offline
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Post: #2
RE: Biggest gamble in world history?
.

Seems like 'People' are financially scared to death regarding the future - - I mean the non-self financial perpetuating ones and this manufactures a "Lack of Desire to Borrow".

Maybe I am the lone man out here, but I don't see anyone but the extreme poor running back out to borrow them selves into the deepest doo doo we have EVER seen. They basically have nothing to lose on a Default.

And too Gamble on Fiat Dollars rallying against Fiat Lending of Artificially Generated Fiat Dollars is pretty stupid - - if he is an ardent student of Friedman and knows the causation of the Great Depression, then he is cloning history in the worst way. Not only dropping TONS of worthless Dollars into the Economy, but hedging that against lending on a "Bailed-Out Financial Infrastructure" ????

Some one explain this one to me really fast ...

And I thought your topic was going to talk about the Obama Election to POTUS ... 03-lmfao 03-lmfao 03-lmfao (we lost on that gamble BIG TIME)

.
03-20-2009 05:36 PM
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