We've reached a juncture in the credit markets where it really doesn't matter how low interest rates go -- banks are refusing to lend and consumers either have no desire to borrow - or they are in such troubled financial straits they can't meet the qualification criteria for a loan. 

So what's the Fed to do?  Many believe the Fed will announce in their post-meeting statement tomorrow afternoon (2:15 p.m. ET) that the answer to rekindling economy growth is actually quite simple - print money like crazy. 

In a nutshell the idea here is that by flooding the economy with money - banks will ultimately find themselves bursting at the seams with capital - and they will essentially have no other option than to start lending.  As the short-term credit market swings back into action, business confidence will rise, employment will improve and the engines of commerce will roar back to life.

 

 
Posted by Debbie Mitchell on 12/15/2008 04:24 PM   Comments (1)  
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DEC
16
2008
1,924,509 Points 155 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I hope they are right, but I'm guessing like everything else the government has tried in recent months it is just a knee jerk reaction to a situation that could fix itself with the banks working on their own internal problems first.

Welcome to the rain and thanks for thought provoking post.
10:44am • #1


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Debbie Mitchell

Keller, TX

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