Anthony B: I think $200 billion is only the unleveraged notional amount, unless I'm missing something. Which would imply that after accounting for the leverage, the effective default risk would be in the trillions.
Thank you for this article. It's strange that so many people only see what's happening right now (deflation) and can't see two steps ahead (inflation) without being led by the hand. Credit is already starting to loosen, albeit slowly, and as the hoarding subsides and more paper currency is released, monetary depreciation (price inflation) will exceed monetary inflation. At that point it will be impossible for spending power to be restored in real terms no matter how rapidly the rate of money inflation is accelerated.
User 267076 is right. Please check the definition of deflation, author. Also, Bernanke wrote his doctoral thesis the Great Depression, and deflation is the last thing he would let occur. Printing money causes inflation, and soon he'll be printing $trillions.
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