A Couple of Thoughts . . . .
1. The Fed-government axis won’t abide economic collapse through deflation.
A. They believe they can arrest it.
B. It is politically unacceptable not to try and arrest it.
C. They have the ultimate weapon of mass destruction — the power of money creation.
D. The fear of the imminent is greater than the fear of the future.
E. The fear of the known is greater than the fear of the unknown.
F. Arrogance and groupthink are powerful forces.
This is not to say that the Fed-government axis will succeed in trying to stave off a deflationary collapse, merely that they will not go down without a fight to the death. They would rather die a different kind of death some other day.