JKC1967

The Banker's Dilemma

This is one of the best articles I have read on SA for quite some time, it really summarizes the macroeconomic situation well. What I like is the emphasis on the Velocity of money in analyzing deflation. As I understand it, John is saying that it does not matter how much money is created by the FED, if it just sits in the "warehouses" due to fear/deleveraging, deflation persists. It makes me think about how some ofthis is psychological in a sense, and that fear can be a self-reinforcing cycle that is difficult to break. Great work John!