Sunday, January 25, 2009

Fed Reserve Fails to Reflate the US Banking System

This video from itulip should assist in illustrating the historical significance and severe problems we're dealing with - in our present, yet growing banking system crisis - Excellent!

For decades central banks set monetary policy according to nonsensical beliefs about credit expansion. The inability of the Fed to stop the current crisis via emergency lending to banks demonstrates that Fed policies are a failure. This movie reveals the scale of this disaster.

1 Comments:

At 1/26/2009 12:07 PM, Anonymous Willy2 said...

Surprise, surprise. The housingmarket is going down the drain and then one is surprised the banks aren't willing to lend ? The current loans of the banks are tanking, companies are going bankrupt left, right and center and that's precisely the reason why the banks don't want to take on more (loan-)risks. To put it another way: the FED can lead the horse(s) (a.k.a. banks) to the water but it can not make them drink (i.e. lend money).
BTW, do you think things over here in Europe are any better ? Think again ! e.g. read this article: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4278642/Monetary-union-has-left-half-of-Europe-trapped-in-depression.html
(This guy (Ambrose Evans-Pritchard) writes very interesting articles in the DailyTelegraph Online.)

And that's ONE reason why the USD hasn't fallen off a cliff. Investors had borrowed USD to go "long" into e.g. equities but when the selloff during the second half of 2008 started they liquidated their positions and as a result the USD strenghted.

 

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