Comment: Excellent point

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Number 2's picture

Excellent point

There is so much phony language around the Fed 'injecting' money into the financial system. The Fed can do no such thing. It can only offer loans. And if there are no takers, well, in this case, they forced the loan to get the money into the system.

But banks still aren't lending. Mortgage rates are at all time lows, and it is nearly impossible for most people to get on. Banks are holding tight, even redepositing that money back with the Fed.

The Fed is in a pickle. If banks do not keep lending, the whole system goes into reverse, and the collapse picks up steam in a deflationary spiral.