Fed's Bullard Sees Japanese-style Deflation Risk

[oldreliable67]

Let me just point out that all of the Federal "stimulus" is chump change compared to the amount of credit destruction taking place. And I don't think it's effective in any case

"credit destruction?" What exactly do you mean by "destruction?" Are you referring to write-offs as uncollectable (as in mortgage foreclosures and credit card charge-offs), consumer voluntary paydowns, or both?

 

[Ahlevah]

"credit destruction?" What exactly do you mean by "destruction?" Are you referring to write-offs as uncollectable (as in mortgage foreclosures and credit card charge-offs), consumer voluntary paydowns, or both?

Both, but I include businesses and state/local governments as well. All are finding their spending constrained due to high debt levels. Throw in stagnant incomes, declining tax revenues, and an acceleration of the savings rate and you've got a real problem on your hands.

 

[Shadow Serious]

*Sigh* In other words his best idea is to have Stagflation II to get us into a more vibrant point. We Need To End The Fed.

 

[Kushinator]

*Sigh* In other words his best idea is to have Stagflation II to get us into a more vibrant point. We Need To End The Fed.

Supply shocks are a possibility. Care to expand your stagflation II theory?

 

[drz-400]

Supply shocks are a possibility. Care to expand your stagflation II theory?

Didn't you know? Increasing the money supply shifts the ag. supply curve...???...left

 

[Kushinator]

Didn't you know? Increasing the money supply shifts the ag. supply curve...???...left

Supply creates its own demand!!!!!!!!!!!!!!

 

[phattonez]

Supply creates its own demand!!!!!!!!!!!!!!

So if that's not true, then people must be willing to work for nothing. That's a crazy economic theory you have there.