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Originally Posted by Spin Banks should be encouraging people to come through their doors and open savings accounts for the difficult times that lie ahead. |
not an option, the only way to achieve this would be to increase interest rates on deposits, money saved is money not spend, and that would have a dramatic effect on Aggregate Demand, and would "contract" Money Demand. Cost of borrowing would become high and distorted. Something you don't want now, like pouring oil on fire.
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Originally Posted by bkkandrew Hmmm, the higher yeild rates on T-bills now suggest people are realising what I save been saying for some while - that that the game is up for Government debt too. Investors face the stark reality of losing their money through a FED default or their investment inflated away when the printing presses are whirring at high speed... |
What a complete non-sense. If investors were expecting the Fed to default, they wouldn't accept the 0% interest rate they have now, the spread risk would be huge, and the Treasury yield on short term notes and medium term notes would be highly positive. This is not the case today. As usual, talking out of your ignorant ass.
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Originally Posted by Spin Im a bit confused about all this talk of inflation. If this money that is being printed is largley being given to companies who are hoarding it to avaoid bankruptcy then how will that money ever trickle down into the economy to cause inflation. |
That's right, it won't in the short term as everyone is adjusting his spending pattern and business investment, but it could in the long run once everyone realize that the storm has passed.