Comments on: The Bane of Broken Balance Sheets http://alephblog.com/2009/03/06/the-bane-of-broken-balance-sheets/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Tue, 16 Mar 2010 21:21:52 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: r.shanker http://alephblog.com/2009/03/06/the-bane-of-broken-balance-sheets/comment-page-1/#comment-21119 r.shanker Sun, 08 Mar 2009 10:15:35 +0000 http://alephblog.com/?p=1491#comment-21119 Perhaps the Fed is restraining itself until we finish stuffing the foreigners with as much longer term treasuries as possible? Why lose the opportunity to do so? The lack of support for the stock market and the constant barrage of "great depression" analogies and public handwringing over "deflation" is perhaps all an elaborate charade to be maintained until the stuffing operation has reached saturation. Then ( I believe soon) the gloves will come off and full blown monetization and inflation will begin . treasury yield will go sharply higher. US banks will buy these higher yielding treasuries with the huge excess reserves they currently have. banks will be healed, inflation will be unleashed, the dollar will weaken substantially and the foreigners ( as per script) would have ben stuffed once again!! Perhaps the Fed is restraining itself until we finish stuffing the foreigners with as much longer term treasuries as possible? Why lose the opportunity to do so? The lack of support for the stock market and the constant barrage of “great depression” analogies and public handwringing over “deflation” is perhaps all an elaborate charade to be maintained until the stuffing operation has reached saturation. Then ( I believe soon) the gloves will come off and full blown monetization and inflation will begin . treasury yield will go sharply higher. US banks will buy these higher yielding treasuries with the huge excess reserves they currently have. banks will be healed, inflation will be unleashed, the dollar will weaken substantially and the foreigners ( as per script) would have ben stuffed once again!!

]]> By: anonymous http://alephblog.com/2009/03/06/the-bane-of-broken-balance-sheets/comment-page-1/#comment-21110 anonymous Sat, 07 Mar 2009 01:46:24 +0000 http://alephblog.com/?p=1491#comment-21110 What does "money good" at maturity matter anyways, given the increasing likelihood of a "simplest solution" inflationary endgame. It's not just speculators who have no interest in buying illiquid long-maturity debt. What does “money good” at maturity matter anyways, given the increasing likelihood of a “simplest solution” inflationary endgame. It’s not just speculators who have no interest in buying illiquid long-maturity debt.

]]> By: JimP http://alephblog.com/2009/03/06/the-bane-of-broken-balance-sheets/comment-page-1/#comment-21108 JimP Fri, 06 Mar 2009 19:23:23 +0000 http://alephblog.com/?p=1491#comment-21108 Sir I have read your blog for quite a while and do like it. As to this post - I certainly agree that inflation - controlled but higher than expected - would be the best solution - and I am also dismayed by the failure of the Fed to provide it. The blog below - which is not mine cause I don't have one - puts the case in a really clear and good way - and I do recommend it to you. http://blogsandwikis.bentley.edu/themoneyillusion/ In one post he says that the last depression was simply a failure of inflation targeting - and that when Roosevelt went off gold the resulting inflation went a long way to healing the economy - and it would have done the job entirely except Roosevelt then put a stop to the healing with high wage legislation. That is a really striking claim. The Fed - and only the Fed - could ACT - act right now - and put a stop to this horror. Why are they not doing so. I wish I knew. Thanks for your attention. Sir

I have read your blog for quite a while and do like it. As to this post – I certainly agree that inflation – controlled but higher than expected – would be the best solution – and I am also dismayed by the failure of the Fed to provide it.

The blog below – which is not mine cause I don’t have one – puts the case in a really clear and good way – and I do recommend it to you.

http://blogsandwikis.bentley.edu/themoneyillusion/

In one post he says that the last depression was simply a failure of inflation targeting – and that when Roosevelt went off gold the resulting inflation went a long way to healing the economy – and it would have done the job entirely except Roosevelt then put a stop to the healing with high wage legislation. That is a really striking claim.

The Fed – and only the Fed – could ACT – act right now – and put a stop to this horror. Why are they not doing so. I wish I knew.

Thanks for your attention.

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