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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Tommaso who wrote (120258)9/10/2001 10:10:26 AM
From: Mike M2  Read Replies (1) of 436258
 
T, the Fed can increase the reserves of the banking sector but the banks need to make new loans for it to work. You must have borrowers who are willing and able to assume debt if not you end up " pushing a on string". The private sector is heavily in debt. The consumer will reduce spending without the wealth effect of the stock market bubble and businesses have and will continue to reduce investment spending in the face of declining profits. At some point the Fed may purchase bad private debt in order to monetize it. I don't expect any attempts to reflate will succeed. the time has come to pay the bill for the excesses of the 90s. mike
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