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Message:: [QUOTE="Cloudsweeper99, post: 1285232, member: 3011"]I would add the following comments [my $0.01]. The toxic assets were largely sold to the Fed, not the taxpapers, or were kept by the banks since they aren't required to mark to market.  Whether or not this eventually comes back on the taxpayers with a bailout of the Fed someday remains to be seen. There was never a real threat of runaway inflation because the recapitalization of the banks was just a replacement of what was lost thorugh default and not a real addition to the money supply.  So the addition to the "flows" was offset by the subtraction from the "capital."  Since inflation measures only look at flows, some of the internet analysts got this wrong. It wasn't a bank refusal to lend as much as a customer refusal or inability to borrow that led to a reduction in bank lending [unless you advocate lending to bad credits].[/QUOTE]