Cash is King for a very good reason. The vacuuming up of the private loan market in the United States is a direct consequence of the Federal Reserve's tactic of inflating the money supply whilst postponing monetary inflation by paying interest to commercial banks such as BOA to hold abnormally large reserves. This may or may not have been deliberately intended to enable an overt politicization of the lending market, but surely there can be little doubt that that is now a distinctly possible result. Either there will be significant inflation at some point in the longer term future, or there will be politicization of the private loan market. It seems this interpretation is not too far away from the views of Hoover economists Michael Boskin and Edward Lazear.
That real life financial horror story was brought to you via Beck.
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