Re:Fed Says Inflation Progress Has Stalled, Extends Wait-and...
by cs702 on Thursday May 02, 2024 @10:15AM
(#40236571)
> Deflation in the 1930s happened because the Fed went the other way, refusing to create money.
Exactly: In periods like the 1930's, central must lend to banks at lower rates and buy fixed-income securities with newly created money as necessary, in order to prevent a deflationary loop. In the 1930's the Fed did the opposite, sending the economy into an even more painful deflationary spiral.
Exactly: In periods like the 1930's, central must lend to banks at lower rates and buy fixed-income securities with newly created money as necessary, in order to prevent a deflationary loop. In the 1930's the Fed did the opposite, sending the economy into an even more painful deflationary spiral.