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Bloomberg/Lisa Lee and Michelle F. Davis/5-19-2020
“Never mind that profits have been wiped out, and that their business operations aren’t viable right now or likely anytime soon. As long as they’re propped up by the Fed, investors are willing to lend.”
USAGOLD note: The COVID-19 bailouts are giving moral hazard a whole new meaning. Does this mean that the Fed can never pull the rug out from under these zombie companies? And if so, what does it mean for the general economy (not to speak of ongoing one-way monetary policies)?