[quote=Rich Toscano]
However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.
.[/quote]
It’s not necessarily “allowing deflation to happen” it’s getting the banks out from under the crushing weight of falling RE values with government support and once they are clear, letting it go, because they have to for one reason or another. There is a line somewhere to what they are willing or able to do. I have no idea where it is, and they may not either, but they have been throwing out signals of reducing support.
[quote=Rich Toscano]
Deflation has no constituency! .[/quote]
But isn’t reducing debt and cutting spending deflationary. Seems there is a lot of people calling for that. There is a certain “party” calling for a number of deflationary measures. And they seem to have been popular this last election.
