Mark in SF

Let's Have Inflation

Yes!! Let's reward imprudent home buyers and by making their debt burden go away. Brilliant!!

Let's punish savers and and the prudent that that did not get involved in the bubble!!

Let force the world to bail on the dollar as a reserve currency!!

Oh, and while were at it, let's wipe out pension funds, insurance reserves, and all the corporate savings accumulated over the last decade!!

I love it!!

Reconsidering the Deflation Risk

<i>In an economy in which 2/3 of GDP depends on “buy now,” the Fed will do everything in its power to prevent this from happening.</i>

Yeah, but the fed does not have much power to prevent the inevitable. Remember pushing on a string? That takes a long long time to work, and it's not working at all right now. But they time it does a deflationary mindset will have set in pretty well. The only thing the fed can do to inflate over this debt mess is start actully printing lots of money (none of this swap/repo stuff), and flirt with the death of the USD. Not going to happen IMO.