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To: SouthFloridaGuy who wrote (1555)	11/29/2007 11:38:12 PM
From: Sunny Jim	Read Replies (1) of 1718

<< the point is to solve THIS problem, the Fed needs to PRINT MONEY NOW and monetize this bad debt before it creates MORE bad debt>>. When you say monetize this bad debt by the FED printing more money, I'm puzzled how that solves the problem. I'm assuming the way that would work would be that the FED makes money available to the banking system so that the bad debt can be rolled over rather than it being defaulted on. That assumes that the borrowers of that debt somehow become able to pay it back or at least pay the interest on it and keep rolling it over. Isn't the reason that it is bad debt because the borrowers don't have the ability to service it? Isn't the FED's providing money just hiding or deferring the problem? Ultimately if the economy is slowing down fast enough, the FED may not be able to prevent debt defaults unless they are willing to underwrite the debts if the banks decide that they don't want to do it (because the borrowers aren't credit worthy enough to have the debt rolled over). Sorry if these appear to be stupid questions, but I would appreciate any answers that you can provide.

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