What effect would the bailout have on inflation? NT

Eric J in MN

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Wed Sep-24-08 06:41 PM
Original message

What effect would the bailout have on inflation? NT

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phantom power

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Wed Sep-24-08 06:42 PM
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1. It would make inflation worse.

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Kurt_and_Hunter

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Wed Sep-24-08 06:44 PM
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2. It's inflationary, but not to the degree some here will tell you.

Edited on Wed Sep-24-08 06:46 PM by Kurt_and_Hunter

700 Billion is a lot of money but it's not a massive percentage of all dollars. We have debased our currency so hard for so long that this deal is just one more thing.

Of course if it works and increases economic growth globally that's inflationary, but that kind of inflationary pressure is welcome. (As opposed to isolated commodity inflation or purely monetary inflation.)

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Eric J in MN

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Wed Sep-24-08 06:51 PM
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4. If they pass the bill,

...will it be easier for someone to get a bank loan to buy a car (for example) or more difficult?

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dipsydoodle

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Wed Sep-24-08 06:48 PM
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3. A lag

It's anticipated outside of the USA that the bailout will only provide temporary dilution of the problem - not solve it.
If the US$ spirals down at a later date then yes inflation is likely to become a problem - but not at present.

I guess Obama may eventually have some real adverse issues on his hands when he's President. I do however believe that he's the man to find solutions.

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