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To: Roads End who wrote (206117)11/21/2002 5:29:58 PM
From: Mike M2  Respond to of 436258
 
R, its a stalling tactic . it buys them time and enables the super wealthy to rip off more of the public's retirement money. If a banker does not suffer the consequences of making poor loans them we will see an increase in poor loans. Vendor financing did wonders for the tech stocks for a while. It enabled management to sell their overpriced stock for a few more quarters. The leadership of the past decade has mortgaged our future for their present. mike



To: Roads End who wrote (206117)11/21/2002 6:03:41 PM
From: Moominoid  Read Replies (1) | Respond to of 436258
 
What Bernanke is saying in effect (very unclearly) is that the Fed directly controls short term interest rates and buy buying longer term bonds they could drive the interest rate on them too to zero...

Just wondering what happens when all interest rates are zero?

Why would you accept zero interest money for long bonds anyway?

This is the classic Keynesian liquidity trap.

Moomin


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