Gary Dvorchak at TheStreet.com says maybe so.
So far, the Fed has decided that allowing lenders to absorb all of the losses they created would wipe out our financial system, so by necessity, the losses are going to be borne by society at large.
The Fed is doing this by deliberately allowing inflation, “actions that return liquidity to the system but devalue the dollars in your pocket.”
Given the huge dollar amount of counterparty risk in the system should a major financial institution fail, then maybe the Fed has little choice. A serious collapse could trigger a domino effect worldwide.
What has changed lately is the number and volume of major financial figures who say we are on the brink of a potential cataclysm.