mdman Posted March 7, 2008 Share Posted March 7, 2008 The fed boosted lending to banks in response to the latest deterioration. http://www.bloomberg.com/apps/news?pid=206...&refer=home My questions for the eggheads amongst you is this - can the fed continue with this response to fix the problem? If it does, what will the economic effect be on the economy and house prices? Quote Link to comment Share on other sites More sharing options...
Optobear Posted March 7, 2008 Share Posted March 7, 2008 The fed boosted lending to banks in response to the latest deterioration. http://www.bloomberg.com/apps/news?pid=206...&refer=home My questions for the eggheads amongst you is this - can the fed continue with this response to fix the problem? If it does, what will the economic effect be on the economy and house prices? People might start to wonder just how useful the new miracle Ben dollars are for buying food! Quote Link to comment Share on other sites More sharing options...
Havoc Posted March 7, 2008 Share Posted March 7, 2008 The problem is INSOLVENCY not lack of liquidity. Increased lending will only help temporarily. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted March 7, 2008 Share Posted March 7, 2008 One letter was only the start of it... O/T: The Jimmy Jangle: Quote Link to comment Share on other sites More sharing options...
Ah-so Posted March 7, 2008 Share Posted March 7, 2008 This will not "fix" any problems, but the Fed has decided that lower interest rates and pumping cash into the economy will soften the coming slowdown/recession and this will be at the cost of inflation. The US economy will still slow and house prices will continue to fall, but it may avoid financial Armageddon. Expect the US dollar to continue to weaken against the euro and yen and perhaps even the pound. Ideally we do not want to see a global recession (especially those of us who do not work in the public sector) so it may be the correct strategy. However, all member of the past Fed Board need to a answer a question: what the f*ck were you thinking when you had interest rates at 1% in 2004 while the economy was expanding rapidly? Greenspan always talked about raising rates to the perfect level where inflation was not stimulated and growth not suppressed. All the time he missed the monster of asset price inflation that was growing right under his nose. It was already wreaking havoc before anyone even noticed it, by which time Greenspan had retired. Quote Link to comment Share on other sites More sharing options...
beefheart Posted March 7, 2008 Share Posted March 7, 2008 This will not "fix" any problems, but the Fed has decided that lower interest rates and pumping cash into the economy will soften the coming slowdown/recession and this will be at the cost of inflation. The US economy will still slow and house prices will continue to fall, but it may avoid financial Armageddon. Expect the US dollar to continue to weaken against the euro and yen and perhaps even the pound.Ideally we do not want to see a global recession (especially those of us who do not work in the public sector) so it may be the correct strategy. However, all member of the past Fed Board need to a answer a question: what the f*ck were you thinking when you had interest rates at 1% in 2004 while the economy was expanding rapidly? Greenspan always talked about raising rates to the perfect level where inflation was not stimulated and growth not suppressed. All the time he missed the monster of asset price inflation that was growing right under his nose. It was already wreaking havoc before anyone even noticed it, by which time Greenspan had retired. In a fiat system recession is essential. we need a recession. the market demands it. However now it is 5 years to late. http://www.shadowstats.com/ Quote Link to comment Share on other sites More sharing options...
Quagmire Posted March 7, 2008 Share Posted March 7, 2008 In a fiat system recession is essential.we need a recession. the market demands it. However now it is 5 years to late. http://www.shadowstats.com/ Forgive me, long term lurker that takes interest in this stuff. How would a fixed value currency (say gold based) avoid this boom and bust scenario? Would we see less overall peak investment and therefore less "boom" company's like google, microsoft? How would it all work without this easy almost free credit system? Would the economy actually be better than it is now with a gold standard? Surely we'd all be worse off in the west since we're essentially stealing wealth from the manufacturing countries? Ok we have to pay it back, but essentially we pay it back with easily printed money. Are we not simply exploiting our position as world powers? Quote Link to comment Share on other sites More sharing options...
Spikey1 Posted March 7, 2008 Share Posted March 7, 2008 How ironic... the more money they chuck in the less "value" the economy has. But it keeps em floating for a couple more months..... BANG! and the money's gone Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted March 8, 2008 Share Posted March 8, 2008 Greenspan always talked about raising rates to the perfect level where inflation was not stimulated and growth not suppressed. All the time he missed the monster of asset price inflation that was growing right under his nose. A bit like if Captain Smith on the Titanic had said, "we should slow down, there may be icebergs about", before cranking the power up to maximum, Quote Link to comment Share on other sites More sharing options...
laurejon Posted March 8, 2008 Share Posted March 8, 2008 This will not "fix" any problems, but the Fed has decided that lower interest rates and pumping cash into the economy will soften the coming slowdown/recession and this will be at the cost of inflation. The US economy will still slow and house prices will continue to fall, but it may avoid financial Armageddon. Expect the US dollar to continue to weaken against the euro and yen and perhaps even the pound.Ideally we do not want to see a global recession (especially those of us who do not work in the public sector) so it may be the correct strategy. However, all member of the past Fed Board need to a answer a question: what the f*ck were you thinking when you had interest rates at 1% in 2004 while the economy was expanding rapidly? Greenspan always talked about raising rates to the perfect level where inflation was not stimulated and growth not suppressed. All the time he missed the monster of asset price inflation that was growing right under his nose. It was already wreaking havoc before anyone even noticed it, by which time Greenspan had retired. The Global Markets expired on Sept 11th 2000, the low interest rates were implemented upon the instructions of the US to world leaders to invent "A consumer led recovery". Indeed we were all told it was our patriotic duty to remove our savings and spend spend spend as method of defeating the terrorists. We all know from our student days how being in debts is like taking drugs, great fun when you are on them, pretty crap when the buzz has finished and you are staring into the cold light of day. We are now in the hangover/Cold Turkey period, the medicine will be to slash public spending, increase taxation, and remove the corrupt leaders that have led us all down this slippery path to ruin. Many future generations will be cursing those who embraced the last decade of unfettered spending, the lies about a Miracle Economy, and the celebrations by Government that caused many young people to live in poverty for an entire lifetime. Todays Generation of young people can look forward to a lifetime of Lovelessness, Heartlessness, Moneyless, Jobless, Homelessness. Quote Link to comment Share on other sites More sharing options...
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