Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Archie Meeties who wrote (46655)	12/12/2000 1:49:45 PM
From: eddieww	Read Replies (1) of 436258

Archimedes, please remember the original hypothetical: The Fed recognizes that our econ is slowing too fast. Impending credit crisis impending stock market crash impending deflation and negative GDP They conclude that gradual easing will not prevent serious recession/depression probably lasting for years. They recognize that a great deal of our expansion was financed by foreigners in dollars, who hold $trillions of dollar IOUs. Instead of allowing the inevitable to simply occur, which would also likely put the rest of the world in recession as well, they decide to rapidly, aggressively loosen credit to the extent of depreciating the value of the dollar by 30%+ Everyone is going to get hammered either way, but under this scheme the US is able to pay it's foreign IOUs at a huge discount while enjoying the benefit of all the overbuilding of capacity in the export market. I never said I expected it, just wondered why they wouldn't. So far the only really plausible, dispassionate objection has been that it would collapse the entire worldwide fiat money system. If it did, so what? The person who made that suggestion would find himself suddenly rich.

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