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To: palmer

That runs into the “pushing on a string” dilemma. You can’t force people to borrow. Interest rates are already near zero. No one is borrowing, and/or no one wants to lend. This is the sort of thing that signals to you that there is deflation.

A lot of what the Fed has been doing is in the attempt to keep asset prices from collapsing. People have loans against those assets and if the price falls below what they owe they will walk away or declare bankruptcy. It would set in motion a vicious spiral.


19 posted on 11/21/2014 12:52:36 PM PST by Pelham (Lawbreaking foreigners get rewarded with amnesty. Laws are for suckers.)
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To: Pelham
It would set in motion a vicious spiral.

True, but the vicious spiraling collapse will only be worse if we postpone it. The theory of expanding debt to infinity has one important flaw.

20 posted on 11/21/2014 3:53:00 PM PST by palmer (Free is when you don't have to pay for nothing. Or do nothing. We want Obamanet.)
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To: Pelham

They should just let the asset prices fall while getting rid of confiscatory taxes and high levels of regulation. That way, when the markets clear, the economy will come roaring back.


33 posted on 11/23/2014 6:14:11 PM PST by Tolerance Sucks Rocks (The mods stole my tagline.)
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