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I can't sleep on a night like this. I have dusted off my copy of Prechter's 2002 book Conquer the Crash. He was five years too early, but the things he wrote about are pretty amazing. On page 129 he writes:
One can imagine a scenario in which the Fed, beginning soon after the onset of deflation, trades banknotes for portfolios of bad loans, replacing a sea of bad debt with an equal ocean of banknotes, thus smoothly monetizing all defaults in the system….Only a government mandate triggered by crisis could compel such an action.
Yeah. One could imagine that.
