Case 1 Fed doesn't print money like fools: Depression.
Case 2 Fed prints money like fools: Depression, worthless USD, lost credibility, New status as third world nation and all that implies.
Post by twetch#1489
What do you think is the effect of Fed support on diminishing the severity of the depression?
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- Block
- 635 507
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- 2020-05-18T22:20:18Z
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- 1G7DLq695juhR7QFz5jn1AaXH55Hxn4kZS
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- twetch
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- post
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- twetch#1489
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Fed only makes things worse. They have bogus tools: 1. change interest rates and 2. print money. Printing money creates inflation, albeit there is a delay. Manipulating interest rates prevents/delays the corrective behavior of the free market.
So, the Fed printing money and buying bonds would increase or decrease the severity of a possible depression?
Obviously increases the severity. Just like everything the Fed is buying , the bond market is turning to shit. So it's really just more veiled printing of money.
I disagree, I think the sudden disappearance of credit and cash flows due to the pandemic would plunge the world in a much more painful crisis if it was not by the central banks injecting liquidity into the system.
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