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Thread: FIRE inflation vs real economy deflation

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    jk's Avatar
    jk is online now Shadow Fed, iTulip Select Member, The Brain
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    Default Re: FIRE inflation vs real economy deflation

    Quote Originally Posted by seobook View Post
    Yup. That is why last year the fed floated the idea of exit fees on bond funds & just recently Larry Summers suggested central banks should buy lower quality debt to lower spreads, etc.
    i guess if they could buy mbs, they can buy anything. not directly, though, which i believe would be illegal. but referring back to bernanke's "making sure..." paper, he discussed offering banks guaranteed profits along with loans so that the banks could buy any damned thing the fed wanted them to. but just as the subprime market had to crash before the fed stepped in, i would suspect some lag in fed action- some piece of the corporates market has to crash first. they probably won't wait as long as the last time, but i very much doubt they would act pre-emptively - otherwise the fed's intervention would likely trigger the very sell-off they're hoping won't happen.
    Last edited by jk; 10-22-15 at 10:45 AM.

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