• 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.
Originally from the pit at Tradesports(TM) (RIP 2008) ... on trading, risk, economics, politics, policy, sports, culture, entertainment, and whatever else might increase awareness, interest and liquidity of prediction markets
Tuesday, August 30, 2011
Steve Conover schools Ron Paul, Rick Perry, Michelle Bachmann, Sarah Palin, a few Tea Partiers
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