By continuing to throw money at the banks, the government is on the road to prolonging the recession and effecting massive inflation once confidence is restored and the economy then has too much liquidity. By making money available to the banks essentially for free, the Fed does not guarantee that the banks will lend out the money to businesses. There is no motivation to lend money at low rates when capital preservation (i.e., lack of confidence) is still a leading issue. Rates may be low, but the banks are not going to offer these rates to the individuals and industries that can make the most productive use of them — at least not until confidence returns.
Time Magazine's Recent article on our Economy
By continuing to throw money at the banks, the government is on the road to prolonging the recession and effecting massive inflation once confidence is restored and the economy then has too much liquidity. By making money available to the banks essentially for free, the Fed does not guarantee that the banks will lend out the money to businesses. There is no motivation to lend money at low rates when capital preservation (i.e., lack of confidence) is still a leading issue. Rates may be low, but the banks are not going to offer these rates to the individuals and industries that can make the most productive use of them — at least not until confidence returns.
-
Wolverine Watchmen: Wannabe X-men vs the Feds
I've been interested in human xenophobia (which I think is instinctive) and race and class warfare since I become politically aware some time in…
-
I, too, sing America
I, too, sing America. I am the darker brother. They send me to eat in the kitchen When company comes, But I laugh, And eat well, And grow strong.…
-
Word of the Day: Melungeon
https://en.wikipedia.org/wiki/Melungeon I had never heard this word until today. Melungeon = Member of a triracial (black, white, native) group…
- Post a new comment
- 2 comments
- Post a new comment
- 2 comments