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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (75285)12/11/2006 1:35:41 PM
From: Mike Johnston  Read Replies (1) of 110194
 
But you have to admit the fact that there are 2 ways the Fed can inject money into economy:

1.Through creation of new credit
2.Through elimination of credit:
a)monetization
b)bailout/injection

So even if there is no willingness to take on more debt, the money can still be injected into economy as Kasriel said, by direct deposits into private accounts.

Bernanke has said that they will use unconventional methods, no matter that such policy creates more damage than it fixes in the long run.

Based on this fact, the money supply is guaranteed to grow, no matter how bad underlying deflation forces will be.
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