The Bernanke Solution

Discussion in 'Economics' started by libertad, Mar 25, 2009.

  1. Add a few 00's to the currency....

    Buy the problem assets at the old prices....

    Sit back and wait .....

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    Does not something smell about this ?

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    But again....what is the logic ?


    Before....there was a $70 Trillion economy....

    $30 Trillion evaporated in a short period of time....


    Thus the economy has a $40 Trillion capability....
    and certain deflation....

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    The $30 Trillion is simply printed and put back....

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    $30 Trillion may or may not have come back via the
    economy's smartest earning it....

    Versus the govt. just printing it....
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    Money left to thin air....

    And came back ....from thin air as well ?
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    So the legal contracts are in disarray with regards to prices....

    But the money is replaced ?

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    So the government replaces the $30 Trillion and defeats
    deflation....?

    And what about inflation ?

    One had $70 Trillion....

    One had $40 Trillion....

    One had $70 Trillion...Status quo...$100 Trillion ?

    Prices dipped....came back....

    Inflation to those who got used to the $40 Trillion economy....?

    Back to the same....for those reliant on the $70 Trillion economy before....?

    The Treasury puts in $30 Trillion ....and has to remove it as well ?

    Or if the Fed does not remove the $30 Trillion....

    Then the inflation reflects a $70 Trillion economy diluted
    by $30 Trillion....

    Thus a $30 Trillion number is assigned to certain inflation....

    If $30 Trillion is not removed ?
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    Thus the normal economy is $70 Trillion ?

    Artificially inflated by the FED to a $100 Trillion economy ?
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    And the winners are the previous losers ?

    And the losers are the previous winners ?

    By government mandate ?


    From a capitalist country ?

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    This not only smells....it stinks....
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