Originally Posted by
tallpilot
How are they going to do it? Start charging banks for excess reserves to encourage them to lend or direct payments? Do they have the legal authority for direct payments? Will banks lend to uncreditworthy borrowers or would they choose to inflate asset prices instead?
The Fed has been trying to create inflation for a long time. They keep failing because the cost of servicing the existing debt eats up all of the additional M2 they create.
I don't like what the Fed is doing and I don't like the trajectory of government spending but I'd still bet on deflation in the intermediate term.
The Fed has been "Pushing on String" for a long time now. Interest rates are so low that the Fed can't get below zero with the tools it has. At the same time the Government of the United states is running the printing presses and printing money full blast. We are approaching what one Fed member called "helicopter money." This was his answer to the question, how do you stop deflation. You take off in a helicopter and push the money out the door.
Russell Napier a Scottish economist has said that Central Banks of the World, (ie, the Fed) are irrelevant because EU Govt's are all in the same boat with near zero interest rates so those governments are simply inflating by legislative fiat.
https://themarket.ch/interview/russe...levant-ld.2323
Check out this youtube video by Ray Dialo, President of Bridgewater Associates has this to say
https://www.youtube.com
/watch?v=7r_O1eDoF8Y
https://www.investmentnews.com/jamie-dimon-of-jpmorgan-chase-warns-of-5-treasury-yields-75446
Jamie Dimon of JP Morgan Chase sees 5% treasury yields on the horizon.