Saturday, August 11, 2007

Reserve to Print More Money

The federal reserve says that it will not allow the market to grind without excess capital. This is functionally saying that they will continue to provide loans even if the credit rating sinks extremely low and inflation becomes high. This is not a consolation to a secondary condition of a market without substantial reserves. The overwatered market will drown and the dry market will merely chafe and provide more technological motivation. A medium between these two might be possible, but it will be tempting to print more money to solve the problems in the short run.

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