Posts Tagged ‘inflation’

Deflation for the US?

Tuesday, March 16th, 2010

Here’s an article on corporate debt and the risk that if leveraged companies cannot get access to credit, they default on their maturing bonds and go into bankruptcy. The act of defaulting is deflationary, all other factors held constant.

Fed monetizations are less than the decline in total credit outstanding for now but inflation could accelerate if the Fed panics later this year and starts monetizing at an increasing rate.