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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 454.39+6.4%4:00 PM EST

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To: TobagoJack who wrote (67697)11/1/2010 10:13:20 PM
From: Hawkmoon1 Recommendation  Read Replies (1) of 219995
 
this can cause inflation before triggering deflation, or the other way around

Can't have it both ways.. I think forcing banks to build capital reserves against EXISTING risk pools would render them unable/unwilling to lend to any entity other than the Treasury or a corporation that doesn't really need the cash in the first place.

That's deflationary, IMO. It would reduce the money supply through de-leveraging of debt-backed assets, which means there would be less money available to be lent to speculate on commodities and other hard assets.

The best we can hope to achieve, IMO, is to maintain some semblance of price stability while debt is paid off/defaulted on and balance sheets cleaned up.

Because banks, or anyone else, cannot lend money against deflating collateral.

Hawk
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