TPC has a good post from Comstock, as summarized below:

So let’s sum this up.  Even in this big “recovery” that is being spun so heavily on financial TV, employment is still down 5.2%, retail spending 8.4%, new single-family home sales 73.3%, core new durable goods orders 19.6% and industrial production 11.5%.  Since the numbers have moved up slightly we suppose that by definition it’s technically a “recovery” rather than a recession, but it does seem like a distinction without a difference.  And remember this is all we’ve gotten from the stimulus plans, the first-time home-buyer credit, cash for clunkers, the foreclosure moratoriums, zero interest rates, unprecedented quantitative easing, mortgage-backed security purchases, Treasury bond purchases, virtual government takeover of the housing market  massive aid to the GSEs and record deficits.  As we have previously pointed out all we have done is shift private debt burdens to the Federal government.  With all that, it is still doubtful that the economy can stand on its own once these artificial supports are removed.  Nevertheless the debts will remain, eventually to be resolved either by future inflation or default.

The last sentence is intriguing… When an obligor’s income (ability to repay) goes up as a result of newly printed money making its way to them, then monetary inflation can make that obligor’s debt easier to be paid back.  But the newly printed money MUST make its way to the obligors.  Suppose the new money goes to the stock or commodities markets to bid those prices up, but the obligors don’t own any of those types of assets – rather they own real estate (i.e. houses).  Then the obligors are no better off despite the inflation.  This is the case for the average consumer.  On the other hand, the banksters benefit handsomely from the government inflation handout.  They will be able to easily pay off their debts…once they sell off their stock and commodity assets…  The one thing that remains to be seen is what that liquidation by the banks will do to stock and commodity prices.

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