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Well, in a properly run central banking system, the CB should act as market maker of last first resort between long and short term funding. So the problem is not, in a properly run central banking system, in the nature of short-term funding (of course in the central banking system we actually have, we are saddled with the ECBuBa...). The problem is in the nature of the geometric effect of leverage upon the solvency of holders of garbage assets.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 12th, 2011 at 05:58:54 AM EST
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