I have a question.. if a few major banks go under, and there are a 5 million people with 100k.. wouldn’t that be highly inflationary?
Nope. The law is that the Fed has to raise interest rates to cover FDIC insurance, which is deflationary.
Unless they change the law that is, which I would not be surprised at all to see.
Note that whomever made this law was a genius, as its probably the only thing thats going to save us Greenspan/Bernake induced hyper-inflation. It will cause a deflationary recession, however.
