True enough, but the problem in the US is that Bernanke's Fed has lead the way in "trash for cash" and he had to know the "assets" were trash, starting with the Maiden Lane "facilities". I strongly suspect that the TBTFs have been much more circumspect than the Fed since 2008. The problem with low haircut high multiplier scenarios could well be that of creating 10 or 20 to one multipliers with "high powered money" and then using that money to blow asset bubbles in stocks and commodities. If, as I suspect, the TBTFs are doing this starting with Fed money from one of the many "credit facilities", it will make it very difficult for the Fed to ever rein in the money supply by raising rates or reserve requirements without causing a monster crash. But it still remains that it is of the nature of bubbles to pop, so....

The whole situation is rather like a rich family or a royal family having a criminal in their midst who is empowered to continue his crime spree because, if found out, it would damage the family. If things get too out of hand, he could suffer an "accident". Except in this situation, failing a thorough-going housecleaning, none of the guilty are likely to pay any price, at least not a serious price. But there is already a world full of victims.

"It is not necessary to have hope in order to persevere."