If there is another financial meltdown, can’t the Federal Reserve just print it’s way out of the danger zone as it did in 2008?
Announcer: If there is another financial meltdown, can't the Federal Reserve just print it's way out of the danger zone as it did in 2008?
Robert Wiedemer: There's a lot of talk about what is going to happen in the next financial crisis. Obviously, we know what happened in the last financial crisis is the government bailed out the banks, and they bailed out insurance companies like AIG, they bailed out the car companies, they bailed out a lot of people, ok, and that's one reason we recovered. So, the question is, can they do this again? My answer is going to be, "No." That's going to make a big difference between this and 2008. The reason they had such power to bail out banks earlier is they had that power to print money without people fearing it, without people fearing it would cause inflation. They had the ability to borrow money. If you go forward, the only reason we're having problems is because people have lost faith in our ability to print money and borrow money, hence, a bail out is really no longer feasible for banks or other institutions.