What happens if we're both raising rates, and also printing the money?
What stops them from going higher for longer while also footing the bill of the government?
Discussion
Bounty: Hereby, I commission humble 21k sats to the best answer by noon central time.
I've been curious about this for long, and never seen this "impossibility" directly addressed.
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Nominal rates are high but inflation is higher, so you’re still loosing purchasing power.
US banks are now protected since they can redeem their bonds at par, leading to more inflation and more moral hazard.
Eventually inflation becomes so high that people will either riot and ask for a new government that will give them more fiat… or they wake up to Bitcoin and opt out of the ever-harder to spin hamster wheel.
Yea, that makes sense. Never going for a positive yield on savings.
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