Posted on 12/02/2008 9:43:23 PM PST by rabscuttle385
He would likely mean coordinated monetary policy from the central banks.
The Carter years were inflation and stagnation but didn’t feature the bank and credit market weakness that exist now. That is the similarity some point to in comparing this recession with the ‘30s.
If John Williams at Shadowstats is anything near to being correct unemployment is currently closer to 14%:
http://www.shadowstats.com/alternate_data
At least back then we didn’t have government as a huge equity owner in banks.
This is the largest robbery in the history of the world.
Only if you ignore the fact that rampant inflation impacts creditors severely which results in some unintended consequences like interest rates that make credit impracticable to the average Joe.
Inflation erodes the value of the dollar and can make credit impractical but it doesn’t threaten to collapse the banking system. Deflation does that.
Markets necessarily require buyers and sellers. When buyers are priced out of the credit market the credit market ceases to operate efficiently, if at all. Which could also correctly be called be called credit market weakness. Which existed along with gas lines, ammo free Army units and hostages during the Carter years.
I was in my 20s during the Carter years and know what happened.
Inflation makes loans expensive, and in the era of Regulation Q even dried up lending. Inflation can be fought in the manner that Fed Chairman Paul Volcker employed, putting the brakes on monetary growth and allowing interest rates to skyrocket.
That is not anything like a deflationary collapse of the credit market, which is far more serious and against which the Fed’s basket of tools may not be effective.
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