Global News

Monday September 06, 2010

How LOW can the Fed GO? Well, they're there now. One cannot go below zero, but printing money and bailing out everyone who is in trouble but the little man is about all that's left. I can't see the Fed paying me to borrow. Many would! Despite a staggering 4.25 percentage points of cuts since September 2007, the economy has not improved - in fact, it has gotten worse, drifting in to a recession last December. Can one think DEPRESSION?

The Federal Reserve has cut its target for a key interest rate to the lowest level ever IN HISTORY and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. Tools is a buzz word for printing money and giving it away. The central bank says it reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25%.

That is down from the 1% target rate in effect since the last meeting in October.

So we now see MUTUAL FUNDS going out of business because they can't pay you any return because they can't get a return on investment from the Fed. We're already seeing HEDGE FUNDS bite the dust and close up shops- Bernard Madoff or no Madoff! Federal Reserve Chairman Ben Bernanke and his colleagues also pledged to use "all available tools" as they struggle to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century.

Slammed by the financial crisis, worried banks have hoarded their cash and been extremely reluctant to lend money to customers. Fearful consumers, watching jobs vanish and their investments tank, have sharply cut back their spending, including on big-ticket purchases like homes and cars that typically involve financing. It's called the domino effect. It's called Trouble with a capital "T".

Ron Paul (R-Tx) testimony to US House Financial Services Committee (& FED Chair Ben Bernanke's response) July 18, 2007