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Politics : Ask Michael Burke

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To: ild who wrote (89415)	2/12/2001 12:06:02 PM
From: Knighty Tin	Read Replies (1) of 132070

ild, The banks get the money from non-interest accounts, like checking. Or from their capital. or from free cash flow from their profitable lines. Or they write it off as a marketing expense and get Uncle Sugar (read you and me paying taxes) to eat part of it. And they amortize the expense over several years, because they know you won't pay off the balance when they change the interest rate to 42% a year and the soul of your first born child. <g> The banks are who get the money. The Fed buys bonds from the banks and the banks then have cash they use to make loans or to invest in shady derivatives. No, Greenspan has done everything he can to keep the patient he mortally wounded on life support. The problem is not that AG is causing the slowdown now. The problem is that he didn't allow the natural slowdown to occur 3 years ago and created greater inbalances in the economy with his overly easy credit position. In other words, we are going to have a slowdown with or without AG. But we will have a worse one, eventually, because of AG trying to delay a milder one.

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