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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: longjonsilvers who wrote (29942)4/3/2005 9:18:17 PM
From: mishedlo  Read Replies (3) of 110194
 
BUT didnt bernanke say in that famous heliocopter speech that the fed did and could once again monetise bonds? is this not, unless im mistaken, equivilent to the fed printing money (not credit) to buy its own credit (treasury bonds). Pray tell, how does this then end in deflation?

In theory they COULD.
In practice it will not happen.
Hyperinflation would bail out debtors (the mass public) at the expense of creditors (banks, financial institutions, and the wealthy).

In other words, it is an unloaded gun.

Finally, even IF they did try there is no guarantee of success. Japan tried for 18 years to defeat deflation with masive public spending on totally useless projects. All it got them was as federal debt of 300% of GDP and still no inflation.

Mish
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