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bamboozled | karma 7012 | avg karma 1.83 · 2022-06-02 21:07:52

My understanding is we’re not necessarily good at preventing crashes. But we’ve used a new strategy (printing money) to avoid one in the short term.

This seems to have created inflation and it’s various seemingly negative consequences.

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rapind | karma 5526 | avg karma 2.67 · 2022-06-02 21:12:05

I believe the technical term is “kicking the can down the road”. We’re experts at it up here in Canada if you’d like any tips.

pm90 | karma 12562 | avg karma 2.33 · 2022-06-02 21:21:57

Deficit spending is not a new strategy.

Financial crashes are often precipitated by short term factors eg inability to come up with enough capital, cascading failures as financial firms fail and spook all investors. The Fed has essentially acted more proactively to assure the market that it won’t let this happen.

If the fundamentals of the system are broken, there isn’t much even the fed could do. That doesn’t seem to be the case (modulo things the Feds cant control eg Foreign Wars).

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bombcar | karma 42761 | avg karma 2.58 · 2022-06-02 21:27:35

Yeah, I wouldn’t say we successfully prevented a 2008 crash until we’re through the next crash - as arguably the 2008 crash was a prevention of a 2001 crash.