At this point, well since they flushed Lehman, don't they pretty much have to print into any and all credit failures? Which is not to say DB will necessarily remain a going concern, but one way or the other they will have to paper over all of its holes. Simply, they won't allow deflation, and the only thing they can use to prevent the default is newly created currency.
The Fed et al would never say this is what they are doing (who would?), so they keep hemming and hawing about being on the fence because too many are willing to go along with it since they are also invested in the emperor without clothes, and are still profiting and solvent today. Or call themselves solvent if they are a bank.
Meanwhile, real markets start functioning outside of the sham, such as true assets realizing more value, people more and more unwilling to lend to sovereigns in the hopes of getting a portion of their money back, and real interest rates rising due to greater risks when lending capital. |
