Daniel Davies.com wrote: > Basically because the Treasury owns the Fed and would have to make good the > capital loss out of appropriated funds. Or allow the Fed to print the money, > which would be passed on as an inflation tax. <
the "printing of money" need not cause greater inflation. Instead it may simply counteract the aggregate demand decline due to the housing mess. It might even keep real GDP somewhat at its current level. >As I used to tell baby central bankers, in the final analysis, the average working customer *always* ends up bearing the cost of *every* financial crisis, because in the final analysis, he is the only one in this game who actually goes out and works for a living.< in theory, the capitalists could be forced to pay... Of course, the balance of political power is way off the mark for that one. -- Jim Devine / "The conventional view serves to protect us from the painful job of thinking." -- John Kenneth Galbraith
