Introduction by the Blog Author
This is an absolutely terrible idea. It risks hyperinflation in the long run and an end to the dollar as the world’s reserve currency. It underwrites the most crooked state and local politicians.
= = = = = = = = =- = =- =- = = =- = = = = = = = = =
A Backdoor Central Bank Bailout of State Governments
By Joel Griffith
"May 02, 2020 -- Government-ordered business shutdowns aren’t flattening just the curve. They’re causing a steep drop in tax revenue for state and local governments.
"To ensure the flow of credit to these cash-strapped governments, the Federal Reserve has embarked on a previously unthinkable act: creating up to $500 billion in new fiat currency and lending it directly to states, cities, and counties through its Municipal Liquidity Facility.
"For now, this staves off default by local governments on existing debt and allows government services to continue uninterrupted. However, this marks a dramatic departure from the Federal Reserve’s traditional role of equipping solvent financial institutions with the liquidity necessary to meet credit demands."
Much more at:
https://www.realclearmarkets.com/articles/2020/05/02/a_backdoor_central_bank_bailout_of_state_governments_490609.html
No comments:
Post a Comment