Tuesday, August 30, 2011

Steve Conover schools Ron Paul, Rick Perry, Michelle Bachmann, Sarah Palin, a few Tea Partiers

• Printing money is the Fed’s tool to fight deflation.

• The Fed can also “unprint” money rapidly.

• Unprinting money is the Fed’s tool to fight inflation.

• Deflation can be triggered or fueled by insufficient money to support the potential production of goods and services.

• When newly-printed money is just sitting there not “chasing” anything, it doesn’t cause inflation or cure deflation.

• Deflation is bad; it hurts borrowers, frequently forcing them to default on their loans – which in turn hurts lenders as well.

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