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View Diary: China Cuts US Credit Rating. Obama Cuts Hawaii Vacation Short. (171 comments)

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  •  Noted by Quigley in 1965: (7+ / 0-)

    "It is to be noted that the control of the central bank over the credit policies of local banks are permissive in one direction and compulsive in the other. They can compel these local banks to curtail credit and can only permit them to increase credit. This means that they have control powers against inflation and not deflation—a reflection of the old banking idea that inflation was bad and deflation was good."

    Carroll Quigley, Tragedy & Hope: A History of the World in Our Time

    I find it amusing that both the ineffectiveness of the Fed in combating recession/deflation and the fact that the monetary system was in general run of, by, and for the benefit of bankers was well known in 1965, but somehow has been entirely forgotten in the intervening half-century.  An obvious example of history repeating itself for those who don't bother to remember.

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