Quote Originally Posted by Fuchs View Post
There's no discussion about ECB priorities. Whenever there's a conflict between inflation and growth, it is obliged to opt for the inflation control target 2% p.a.. Period.
Exactly what I quoted, and the point still remains that growth is an objective of the ECB, contrary to your earlier statement.

Quote Originally Posted by Fuchs
"Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it."

You confuse world and non-U.S. world here.
When the non-U.S. world reduces its lending of money to the USA, the non-U.S. world would have more money left for consumption/investment. Simple fact.
That's what you denied (instead, you claimed they'd have less money to spend). I did never write about increased world-wide demand here.

And the present situation of assumed good ROI in the U.S. is a present situation, one that would not persist in the scenario we were talking about; an economic crisis in the U.S. that shrinks its huge imports.
No, I didn't confuse anything here. The investment/consumption amount of non-US countries doesn't change in the net, it only changes geographical locations (with lower expected returns). Either way, it is the exact same amount money being allocated differently based on the consume vs. save (invest) decision now that the best option has been eliminated.

Like Schmedlap, I give up. We are down in the weeds and missing the big picture that I think Rex intended with this fun graphic.