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To: kevao

Thanks, kevao. Good point about inflation.


14 posted on 01/27/2012 5:25:57 AM PST by unkus (Silence Is Consent)
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To: unkus

By the way, we may still get inflation even without producers taking loans to create/expand their activities. Like with the last couple of QEs, a lot of that money will go into the stock market, seeking higher returns there than it can get in fixed income vehicles. If the market goes up enough, the “wealth effect” might kick in — people start feeling flush and thus start spending more. And *then*, if producers misinterpret that new spending as a real increase in demand, they will start expanding their activities, and we’ll be off into yet another unsustainable boom....


16 posted on 01/27/2012 7:12:34 AM PST by kevao
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