Originally Posted by
RXS676
What about when the securities that the fed "purchases" are U.S. Treasurys? This has been rampant over the last 4-5 months. The fed buys U.S. Treasurys, providing cash to the Treasury which is spent immediately and in full. I understand this is incidental to the point of the article, but the federal reserve absolutely has the ability to directly increase the amount of money the economy. This is a dangerous slippery slope to hyperinflation.
In addition, deflation penalizes debtors, who are the helpless victims du jour.
The article was written in July... which I found to be interesting. What you are talking about, I believe, is largely a political/group think response to what is going on... something that is intended to be a stimulating force for employment... which may work for sometime... and then it'll be hard to stop the inflationary train... It'll be really interesting when the Fed tries to slow things down maybe next year sometime.
I'm not sure I could call debtors helpless victims.