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Tbh I think central bankers were betting that 0 interest rates would have inflated the economy out of bad debts. The pass on effect never materialized and asse
by lumost 5y ago
Tbh I think central bankers were betting that 0 interest rates would have inflated the economy out of bad debts. The pass on effect never materialized and asset managers went crazy.
If inflation hit 10% in ‘08 the banks would have been hammered on paper due to fixed income bets, but would never have been in danger of running out of cash due to new deposits.
- jbay808 5y agoI don't think it's as easy as people think to inflate away debts, because you have to do it without incentivizing debt growth at the same time. Maintaining high inflation and low interest rates strongly incentivizes new debt creation, so the debt burden doesn't decrease.