sam gindin wrote: > Not necessarily. The Fed can maintain its general policy and intervene > selectively to deal with a specific emergence (as long of course as its > specific, not generalized). It did this re the Long term Hedge Funds and > other potential major bank closures in the 80s and 90s<
what I said was:>if there's a financial problem due to big Hedge Fund melt-down(s), the Fed may find itself between a rock and a hard place (to use the late Hyman Minsky's phrase). Saving the Hedge Fund and stopping the spread effects of a default goes against the Fed's current anti-inflation goals.< my statement was so well hedged (or if you wish, so filled with weasel words) that "Not necessarily" is irrelevant. In other terms, I was saying that the larger the meltdowns and their spread effects, the larger the _possibility_ of a rock/hard place problem. JD
