Re:Fed to buy junk bonds, lend to states in fresh virus support
by baq on Thursday April 09, 2020 @05:05PM
(#22827196)
how much money disappeared from the stock market in the past few weeks? i wonder if the numbers that we're talking about match up. there might be little actual printing involved, just using that idle money parked at bank accounts instead of stocks.
[ Parent
| on HN ]
Re:Fed to buy junk bonds, lend to states in fresh virus support
by nickff on Thursday April 09, 2020 @05:12PM
(#22827258)
My read is that velocity of money has decreased (leading to decreases in nominal prices), and they are printing money to increase M2 (sometimes described as the money supply). This will reduce/prevent immediate deflation, but could lead to inflation when the velocity increases again.