xcel
10-09-2008, 09:18 AM
"The choices for the real economy are between a recession and a depression." (http://www.businessweek.com/magazine/content/08_42/b4104028030821.htm?chan=top+news_top+news+index+-+temp_top+story)
http://www.cleanmpg.com/photos/data/501/Federal_Reserve_Building.jpgPeter Coy and Stanley Reed – Business Week – Oct. 8, 2008
Federal Reserve Building in Washington DC – Where the real power has been the past 8–weeks.
The world's governments are shocked and dismayed by their inability to stop the increasingly grave financial crisis. Nothing they have attempted has gotten lending flowing normally. Profitable companies are cut off from borrowing. Confidence is shot. Through Oct. 7 the U.S. stock market had its worst five-day performance since 1932 on fears of a severe economic downturn…
Can anything be done to halt this panic? As a matter of fact, yes. It won't be quick or easy. But the prerequisite for a new approach is unlearning doctrines that were developed in the aftermath of the Great Depression, the last time financial conditions were worse than this. The world has changed in the intervening seven decades, and what worked to quell the financial crisis then may not work now—as anyone trying to borrow money can see…
Following this logic, the Federal Reserve is aggressively lending money to all comers. The synchronized international rate cuts on Oct. 8—which lowered the U.S. federal funds rate to just 1.5%—is another example of helicopter money. Central banks figure that by flooding the banking system with reserves, they can get banks to relend the money to the rest of the economy… http://www.businessweek.com/magazine/content/08_42/b4104028030821.htm?chan=top+news_top+news+index+-+temp_top+story
http://www.cleanmpg.com/photos/data/501/Federal_Reserve_Building.jpgPeter Coy and Stanley Reed – Business Week – Oct. 8, 2008
Federal Reserve Building in Washington DC – Where the real power has been the past 8–weeks.
The world's governments are shocked and dismayed by their inability to stop the increasingly grave financial crisis. Nothing they have attempted has gotten lending flowing normally. Profitable companies are cut off from borrowing. Confidence is shot. Through Oct. 7 the U.S. stock market had its worst five-day performance since 1932 on fears of a severe economic downturn…
Can anything be done to halt this panic? As a matter of fact, yes. It won't be quick or easy. But the prerequisite for a new approach is unlearning doctrines that were developed in the aftermath of the Great Depression, the last time financial conditions were worse than this. The world has changed in the intervening seven decades, and what worked to quell the financial crisis then may not work now—as anyone trying to borrow money can see…
Following this logic, the Federal Reserve is aggressively lending money to all comers. The synchronized international rate cuts on Oct. 8—which lowered the U.S. federal funds rate to just 1.5%—is another example of helicopter money. Central banks figure that by flooding the banking system with reserves, they can get banks to relend the money to the rest of the economy… http://www.businessweek.com/magazine/content/08_42/b4104028030821.htm?chan=top+news_top+news+index+-+temp_top+story