That was an excellent read. Thanks for the link.
Perhaps the biggest "collateral problem" that comes with the imposition of any of the options is that each extends us further into the unknown. Since 1913, whenever financial failure loomed, economists further leveraged U.S. assets and goodwill in order to keep things afloat. At this point, they're getting SO "creative" (to be kind) that the risk of failure and the price of being wrong is enormous. The U.S. doesn't have the gravitas it once did. It doesn't dominate the world like it used to. Even its military fails to command the respect or provide the assurance it did a couple of decades ago, almost guaranteeing to others that U.S. investments will be around and safe for very long periods.
One of these days - and maybe that day is tomorrow - one of the creative leverages implemented by the Fed on an assumption that the U.S. is "too big to fail" will, in fact, fail. When it does, our economy will fall down. That's what houses of cards do.
Awakening to this reality will be a shock to everyone. You can't very well prepare emotionally for such a thing even if, logically, you know it's going to happen.
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