Posted on 12/21/2013 10:06:33 AM PST by Errant
Money in a bank account is, of course, cash. It's pretty much the last place you want money during inflation, except for maybe your mattress.
You are shorting cash by using interest bearing instruments that are cash equivalents, you are in fact "cashing out" of a depreciating asset (cash) by buying a cash equivalent before the greenbacks next trade, which, during hyperinflation will be lower. That's shorting cash.
Yup.
to "buy bad assets."
Nope. They only buy US Treasuries and MBS backed by the US Treasury. No bad assets here.
Yes, that's printing money out of thin air and has resulted in a net give-away to the big banks and wall street. Every major Conservative economist and commentator recognizes that fact.
Giveaway? How?
Most banks have met and are exceeding the capital requirements set by the Fed.
Until the requirements are changed. Or the Feds come up with a new "stress test". Why loan up to your capital level when the rules can change? Or when Obama can sue you at any moment to extort billions?
Summary: it's not loaning money that the banks are afraid of == they're afraid of the INCONSISTENT FED AUDITS they're subjected to.
Keep a big cash cushion, to protect yourself from a new audit.
No, shorting cash is borrowing to finance a hard asset.
I understand you have to borrow the instrument to sell it short. That is really not the point of the post.
If you’re talking about “shorting cash” to benefit from inflation, you’re talking about borrowing.
Do you simply not read the posts that have responded to you? I’ve already told you that I’m fully aware that you have to borrow the instrument in order to short it.
Having a flat cash position is not shorting cash.
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