The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (31138)	4/25/2005 11:23:58 AM
From: piggington	Read Replies (6) of 110194

Hi Mish - I agree that deflation is what SHOULD happen at this point, but I have one question concerning whether it WILL happen. (I'd be interested in what the other bond wizards on this board think as well). You say that the Fed cannot force people to lend. Agreed. But what's to stop the government from becoming the lender of last resort? I could envision a bailout program for banks or even for individual homeowners, wherein the govt effectively monetized private sector debt. Who's going to turn down an offer from Uncle Sam to pay down your mortgage? I'd be interested in people's thoughts on how possible this is. IMHO this is a key question in the inflation vs. deflation debate. rich

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