Deflation will now Accelerate

Housing is the problem as we outlined earlier today. The Fed’s statement today in saying it will not add to its Mortgage balances but will in fact keep its Balance Sheet flat and roll old mortgage money into Fed securities means that the problem area will turn into a bigger problem area.  This will probably add pressure to housing and tie up money in non-performing T-Bonds plus the rescue facility of the Fed will have its hands tied when the wheels come off.

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