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The PPP was precisely Bernanke's "Dropping money from helicopters" scenario. I think the fear of a Depression was real, and the government was willing to pull
by baskethead 4y ago
The PPP was precisely Bernanke's "Dropping money from helicopters" scenario.
I think the fear of a Depression was real, and the government was willing to pull the level on the most outrageous tool they had, which was drop money from the skies into the pockets of people who could spend it.
Of course I think that was wrong, but I know exactly where this came from, and it was a playbook that was broadcasted by Bernanke I believe decades ago to fight a Depression. At least we can all agree that it worked, although a little too well, which is why asset prices have skyrocketed and inflation has gone horribly wrong.
- maigret 4y agoThe action of the FED was clearly faster, heavier and in the end better than the ECB. As a result, the FED was able to increase the interest rates faster. Sure it was not perfect but "good enough".
- sofixa 4y ago> The action of the FED was clearly faster, heavier.. than the ECB Well of course, the situation was vastly different. First, in most EU countries there were very few people losing their jobs due to various existing or expanded temporary/partial/etc. unemployment schemes which meant that people kept their jobs, but were paid by the local government instead of the business. Second, the ECB didn't have the required authority to do what needed to be done, and it required negotiations between the eurozone members to agree on how to proceed in regards to loans. And third, actions were taken locally at each government level.