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Thursday, November 20, 2008

Inflation consensus is arising

Real Time Economics : Guest Post: Markets Test U.S. Resolve

One longer term approach may now appeal to the Federal Reserve, i.e., a
more expansionary monetary policy steepens the yield curve, raising
profitability for banks and generating sufficient inflation. This is
not without substantial risks, but house prices recover. Most large
banks can and should survive in that scenario.


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