Mispricing of risk by Basel 2 and the Fed allowed the housing bubble to feed off of itself. Mispricing securities that were sold as bonds seemed to be a bi partisan effort though George W Bush was the president of note. Here is my concern. I think that Bannon wants a big recession so that he can implement the stimulus he wants. But Trump may want a housing bubble. I have written about both of these scenarios. Posters can let me know if they want links to those articles.

I think the Fed secures its money and it isn't classic fiat money.

What if they know inflation is not a risk and just want to give banks a raise on their IOER? And also possibly free up more bonds in a tight bond market?

The central bank appears to be fond of liquidating everything in a downturn, making the downturn worse. It doesn't have to be that way. It is a sure way to fleece main street every time.

Craig, Amazon will not excel at customer service because this is a produce business. I wrote about the Whole Foods problem here: www.talkmarkets.com/.../amazons-jeff-bezos-doesnt-understand-female-shoppers

Pricey properties are often times not foreclosed on because that would damage the value of these properties. This was done in Nevada in wealthy neighborhood s. But most all of NYC is pricey. I think it is a scam to keep sales up.

Williams Sonoma is probably going to do well.

Thanks for responding, Michael. I think that even money targeted to Main Street ends up in the gears of big business, and the velocity of money still seems really weak at the consumer level.

Great article. Makes the inflation hawks continue to look silly.

Flooding the financial markets with money is not the same thing as flooding main street with money. And that isn't happening.