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But why would there be liquidity crunch? March 2020 showed us QE to fund a credit backstop works wonders. Maybe inflation is the way things go south but definit
by ivalm 6y ago
But why would there be liquidity crunch? March 2020 showed us QE to fund a credit backstop works wonders. Maybe inflation is the way things go south but definitely not a credit crunch.
- david927 6y agoBecause magic doesn't exist. It's not the first time humans have ever thought, "Why I'll just manage my debt by inflating my currency!" Look at Germany in the 30's. You can say that wasn't a liquidity crunch but it was in terms of non-currency liquid assets, such precious metals.
- ivalm 6y agoNotice how we no longer back currency with metals. Again, hyperinflation does exist, and I did mention in my reply, liquidity crunch does not exist given current policy.
- david927 6y agoI see what you're saying. Personally, I think that hyperinflation would mean a fire sale on assets for gold and silver -- and that's a really good way to describe a liquidity crunch. But I concede the point.
- onlyrealcuzzo 6y agoAre gold and silver not assets? Why would everyone suddenly not want all the other assets and only want gold and silver?
- david927 6y agoThey're fungible assets which are incredibly liquid and easy to transport. Historically, that's money.
- throw0101a 6y ago> Look at Germany in the 30's. Except that the hyperinflation occurred in the 1920s: * https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...