This is the kind of crisis the Fed was created to deal with.
In the Great Depression, everything fell apart.
Now, everything's trying to fall apart, but so far the Fed's done a pretty good job of keeping it together.
This is the nuke the Fed was created as an ABM for. We just haven't had that nuke actually come in until now.
The Fed is nice for keeping things balanced day to day, year to year. That's not it's primary reason for existing. It's reason for existing is to put the breaks on a panic in a crisis like this and give people and institutions time to calm down and adjust their financial positions rationally.
The banking system may still fall apart, hard. But it's much less likely, and the falling apart part is much less likely to cascade through the system like it did in 1929 and the 1930's.
Of course everything spiked. We haven't had this level emergency again since 1929. The Fed is performing its real raison d'etre.
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In the Great Depression, everything fell apart.
Now, everything's trying to fall apart, but so far the Fed's done a pretty good job of keeping it together.
This is the nuke the Fed was created as an ABM for. We just haven't had that nuke actually come in until now.
The Fed is nice for keeping things balanced day to day, year to year. That's not it's primary reason for existing. It's reason for existing is to put the breaks on a panic in a crisis like this and give people and institutions time to calm down and adjust their financial positions rationally.
The banking system may still fall apart, hard. But it's much less likely, and the falling apart part is much less likely to cascade through the system like it did in 1929 and the 1930's.
Of course everything spiked. We haven't had this level emergency again since 1929. The Fed is performing its real raison d'etre.