SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (72747)12/24/2007 1:17:24 PM
From: KyrosL  Read Replies (1) of 116555
 
>>The Fed has never issued free chips.<<

You are quite right. The Fed has never given 'free' money to anybody during its existence -- other than the US Treasury, of course.

However, when the Fed sets the discount rate at 1%, keeps it there for a year or more, and implies that it's going to stay low for a while, then banks can borrow short, lend long, and essentially coin profits with little, if any, risk. That's the way the Fed uses to indirectly issue money to the banks. It's not going to be different this time. If things become dire later in 2008, I expect the Fed funds to dip to around 2% or less and stay there for a while.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News