couple of comments:
1. Inflation is not the no.1 issue for the coming two years at this stage of the game, unemployment rate is. Look at today's manufacturing data.
2. It's not important to whom this $700 bln being sold to; it's important from whom and at WHAT PRICE the revised bailout plan buy.
To clean out the "toxic assets" on financial institutions' balance sheet and restore the lending confidence / credit liquidity, buying up those craps by the treasury is a practical plan. However, due to the information asymmetry, the buying price maybe tricky in this "lemon" market. Let alone even the owner and originators may could not figure out the fair value now.
3. The drop of commodity (except gold, the safe-heaven) and energy was due to the fears of inflation and US$' depreciation, but the expectation of the economy slowdown after the failure of bailout plan.
1. Inflation is not the no.1 issue for the coming two years at this stage of the game, unemployment rate is. Look at today's manufacturing data.
2. It's not important to whom this $700 bln being sold to; it's important from whom and at WHAT PRICE the revised bailout plan buy.
To clean out the "toxic assets" on financial institutions' balance sheet and restore the lending confidence / credit liquidity, buying up those craps by the treasury is a practical plan. However, due to the information asymmetry, the buying price maybe tricky in this "lemon" market. Let alone even the owner and originators may could not figure out the fair value now.
3. The drop of commodity (except gold, the safe-heaven) and energy was due to the fears of inflation and US$' depreciation, but the expectation of the economy slowdown after the failure of bailout plan.