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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: elmatador who wrote (16924)3/18/2002 4:35:30 PM
From: patron_anejo_por_favor  Read Replies (1) of 74559
 
<<Hence lenders are not demanding 'inflation premiums' because they are not afraid of future inflation.

Actually, it's simpler than that...lenders aren't demanding an inflation premium because they aren't lending:

stls.frb.org

Money growth expansion is occurring through GSE lending, not the banks per se. GSE's are "shielded" (or so they think) from credit risk by securitization of debt. Therefore, "they don' care credit quality no more". The lenders who aren't so fortunate (ie, banks lending to businesses) aren't quite as sanguine, thus the striking and severe disparity between money supply growth (MZM) and C&I lending...

BWTFDIK?
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