[vivafrance]

> Monetary policy may have prevented a worst case depression

I vehemently disagree with this claim. The central banks of the world have merely masked a massive default on debt by inflating it away in a coordinated manner. The owners of that debt made out like bandits while the rest of us paid for it through the devaluation of our savings and wages.

[TimMurnaghan]

There always are people who vehemently disagree. Read Tim Geithner's memoir "Stress test" and his fights with the "fundamentalists". Luckily he won enough of the arguments and the bail outs meant that the US recovered more quickly than those economies who kicked the can down the road.

[s73v3r_]

The alternative is allowing everything to crash. The rich bankers wouldn't have had a problem, but millions more everyday workers would have paid a far higher price in terms of unemployment.

[ithkuil]

Honest question: don't the rich also lose during a global crash?

[sgt101]

If you are rich you have a number of advantages in a crisis of any sort, global or personal. If you are rich you can diversify your assets away from property and cash - into commodities, stocks, bonds, art, luxury goods, gold and so on. If you are rich you can loose significant percentages, even the majority of your net worth and not worry. This allows you to have liquidity when assets are very cheap, at the bottom, and then you can get those assets! In a crisis there is more bad luck about, poor people are wiped out by a drip of bad luck, rich people need a big dollop, only a few people get a big dollop of bad luck. Only the tail of the distribution of rich people are wiped out, the tail of poor people don't.

[CocaKoala]

Sure, but if you go from a net work of 7 million to a net worth of 3 million, that's a different type of loss than going from a net worth of ~250,000 to a net worth of ~0 because you lost your house and are in debt up to your eyeballs.

[Spooky23]

Actual rich people benefit. Highly leveraged “rich” suffer.

I have an acquaintance who is a big landlord. The housing crash was literally the best thing that ever happened to him. He literally bought dozens of properties all of the place because he sits on big piles of cash and has generous credit lines backed by his cash flow.

My guess is that he spent about $10M and netted at least 3x from the 2008 crash.

[Nasrudith]

Depends on their reserves vs active business investments and if stability can be maintained. Recessions are good for people with liquid reserves and sufficiently unaffected supporting ability as they can acquire assets at fire sale prices and then reap profits once recovery comes. It sounds exploitative but serves a useful function as without them the liquidating party would be extra screwed.

[s73v3r_]

Not really. They don't lose their houses, their families aren't at risk of not eating, except in rare cases.

[api]

The rich win in either scenario. In the bailout scenario they pocket most of the froth. In the crash scenario hyper-deflation causes cash to increase vastly in real value, allowing the rich to swoop in and buy up everything that isn't nailed down at a massive discount. They then get to ride everything back up as the recovery takes hold and pocket most recovery gains.