Dalio, Biggest Hedge Fund Manager: "developed world has reached its debt limit"

Re:Dalio, Biggest Hedge Fund Manager: "developed world has r... by jpdoctor on Monday October 24, 2011 @11:58AM (#3150139)

Yes, and compare the Swedish solution: Let the banks go bankrupt, then QE. Iceland also did this recently.

It ripped the band-aid off quickly. More pain short term but their economies emerged quickly from the downturn. Too bad our gov't is so captured by the financial interests that such a solution is deemed unviable.

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Re:Dalio, Biggest Hedge Fund Manager: "developed world has r... by effn on Monday October 24, 2011 @02:05PM (#3150768)

Sweden only let one of its smaller banks go bankrupt, in the early 90s, and has never done any QE.

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Re:Dalio, Biggest Hedge Fund Manager: "developed world has r... by jpdoctor on Monday October 24, 2011 @02:28PM (#3150880)

> Sweden only let one of its smaller banks go bankrupt

See, eg. http://www.nytimes.com/2008/09/23/business/worldbusiness/23k... , note the term "series of bank failures."

As for QE: Note there was a devaluation imposed by the exchange rate, and the peg evaporated. So you are correct that Riksbank did not print, but the QE was achieved by the currency markets.

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Re:Dalio, Biggest Hedge Fund Manager: "developed world has r... by effn on Monday October 24, 2011 @04:40PM (#3151492)

Nope, NYT is wrong on that one. I suspect they are referring to the implosion of the real estate sector which brought down a number of companies, but none of them where banks.

QE is a word with a specific meaning, it's not just a synonym for "stimulus". It refers to the buying of financial assets by the central to increase their value, and/or to increase the money supply. Ending a currency peg has nothing to do with that.

Note that the bailout operations that did take place did so after the end of the peg.

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