RE: RE: Excellent start to the year. Fishtail,
You wrote.... "......... printing more money to immediately support the private banks that own the troubled sovereign debt".....there are two significant issues IMHO with that statement :
1. Serious escallation of Sovereign debt in some cases has been caused by failure of private banking assets and government support of bank bond holders.
2. Continued printing of money is my "definition of inflation"...... a result of which is consequencial increase later in prices....parts of the industrialized world continues to live in a fiction - that it can afford its current lifestyle by going further and further into debt. We would do well to take into account the observation of Bank of England Governor Mervyn King when he stated last year that,
"Increasing money supply is not a solution. All this can be is to help with temporary relief for liquidity problems, but those problems are a result of solvency(asset value and debt) issues."
The U.S. Fed's entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone( junk that the banks needed to clear off their own balance sheets). As the size of the Fed's balance sheet ballooned, the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet..... this can be very serious going forward.
These issues are difficult to solve and they do not disappear by simply printing money, which has many consequences including the re-distribution of wealth.
Wilan is on the right side(IMHO) of the overall need to foster R&D and protect IP for the creation of goods and services that the rest of the world wants to have,
Peace,
Good Decision-making to All,
ElJ