[AdamSelene235]

If the Fed wants to end deflation, all that it has to do is turn up the speed on their printing presses and flood the market with money. But having control over inflation does NOT equate to having control over the speed of money.

You are speaking metaphorically....Obviously, they don't increase they supply of paper money with presses as this is an insignificant fraction of the money supply.

They lower interest rates making loans less costly so more loans are made...Obviously, if you hit zero interest and prices are still falling there is a problem....

I hear they are considering tweaking the multiplier restriction....That doesn't sound like such a good thing to me...

[Southack]

"I hear they are considering tweaking the multiplier restriction....That doesn't sound like such a good thing to me..."

It could be dangerous, but it has its place.

Increasing the leverage for banks on their consumer loans is a fairly bad idea. Increasing the leverage for those making safe asset and insurance-backed loans is probably worth the "risk", however.

If a mortgage company has legitimate investors, makes (originates, not pays a premium to buy them from another originator) legitimate home loans, properly insures those home loans, and sells off all of those notes on the open market, then having a bank increase said mortgage company's leverage is probably not a very big deal.

Wanna bet that in the near future some clever fellow suggests that the SS privatization might be permitted to buy such insured, asset-backed securities that pay vastly more than the standard social security investment returns?!

If SS starts buying home notes, then even the over-priced California home market will be safe for another 3 or 4 generations of ridiculous overpricing (i.e. revisit this issue in the year 2100 AD).