reducing interest rate to broke dicks is a waste of time.
Send everybody a big check!!!!
The Fed’s Shooting Blanks | PRAGMATIC CAPITALISM
In the midst of the U.S. economic slowdown, the ability of the Fed to do much more is doubtful. Despite the Fed’s reduction of its growth estimate and its increase in the unemployment projection, the action it took is minimal and unlikely to help. As we wrote in last week’s Special Report, “.the easiest and most reliable measures have already been taken and any remaining weapons are unorthodox, untried and subject to unknown negative side effects”. Chairman Bernanke essentially confirmed this at yesterday’s press conference, when in answer to a reporter’s question, he said, “.the types of unconventional programs that are now available.we know less about them.they have various costs and risks, and for that reason, we might get a different amount of financial accommodation in this kind of regime than one where short-term interest rates can be varied freely”. He added that a larger Fed balance sheet would be harder to reduce later, could impair markets or foster financial instability. Although Bernanke did say that the Fed was not out of ammunition, we got the impression that the Fed had done pretty much all it can and that factors such as Europe and the U.S. “fiscal cliff” were beyond the Fed’s control.