| хайку. Кобаяши Исса. Kobayashi Issa 1821 |
[Sep. 30th, 2008|04:19 pm] |
often, but unfortunately not always, when i see a yet another monstrous stupidity posted in lj, i bring to my mind the "duty calls" strip from xkcd ( http://xkcd.com/386/); take a few measured breaths through my nose ( imagine that you are a guard at the gate of an oriental city, and every breath is like a caravan slowly entering and leaving the gate), and translate a haiku.
春めくやのらはのらとて藪虱
harumeku ya nora wa nora tote yabu-jirami
it's springtime!
even the thicket's lice
move into the field
translated by David Lanoue
весна!
даже лесная вошь
выходит в поле
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[Sep. 30th, 2008|05:33 pm] |
1. The Fed will keep pumping money into the banks;
2. For a while, the banks will be reluctant to lend the money, because of risk uncertainty.
3. Then, the banks will decide that the risks are manageable.
4. And they will flood the economy with cheap money.
5. The question: How will the Fed be able to remove the excess of money?
a) by selling bonds. hm. but why would banks buy the bonds if commercial paper were to offer a better rate?
b) by raising interest rates. but if the economy is in recession it, the fed action, will make the situation even worse.
Therefore, step 5 has to happen between steps 2 and 3. Otherwise we'll have a runaway inflation.
It could be that the so-called bailout, if it comes between steps 1 and 3, would allow the Fed to control the (money pump)-to-(market fear) ratio. But to succeed they would have to walk a very tight rope.
My bet would be that they'd rather err on the side of inflation, rather than recession.
In the meantime, we've lost at least a year's worth of investment into the real economy. This means the recession/stagnation, in real terms, will last another year or two.
Am I missing something? |
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