Dec 17, 2008 12:02am
Closing Arguments: Fed’s Lean New Interest Rate
EmailThe Federal Reserve today slashed its benchmark interest rate to between .25 percent and 0 percent — the seventh cut in 2008 and the lowest rate in the Fed’s 95-year history.
The move is designed to free up lending between banks and ultimately improve the economy by making it easier for consumers to borrow.
The news was welcomed on Wall Street — the Dow Jones closed up some 360 points.
So tonight, we ask you: Do you think this unprecedented rate cut will lead to an economic recovery? Or will this economy in recession sink deeper into a depression?
Tell us what you think.
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The rule of 76 (i.e., the lenght of time it takes money at a set interest rate to double [rate divided into 76] applies to debt as well.
Posted by: olin tucker | December 17, 2008, 6:34 am 6:34 am
I think that reducing the rate to induce borrowing is not good and attempts to foil the natural corrective process of our undersaved and overextended citizens and government in order to manipulate the collapse after having catalyzed the bubble that the collapse is relative to earlier in this decade with similar interest rates. All the fed seems to be doing is becoming another market manipulator like a common trader who has media access and is propagating defaults, unnatural outcomes and volatility farther into the long term.
It appears that validating ill conceived contracts and mortgages is a higher priority than allowing an natural return to true value dampen and stabalize the long term towards a sustainable future.
It also raises suspicion that the government is attempting to induce the inflation that the people have been voting against with their wallets recently in order to devalue its spendthrift military debt and unfunded entitlement obligations under the cover of short term “stimulus” to ease the Ponzi scheme volatility it helped to induce in the prior round of rate cuts under Greenspan.
Is the government just pretending to save the private sector from economic “doom”, similar to the doom of nonexistant WMD’s that we are paying 10B/mo. to temporarily clear from one small faraway nation, in order to accomplish some ulterior motive? Or is it just that the need to be perceived as a hero at the public’s expense has become too easy in a nation of hand-to-mouth budgets.
Posted by: nightline viewer | December 17, 2008, 5:24 pm 5:24 pm
We are in trouble with this economy because we are a nation of over spenders.People have been living on credit cards for a long time. Some time you have to pay for all the past( over spending) and a false economy THE TIME IS NOW No I dont think any thing is going to help except confidence in a safe well paying job (not a state minimum wages employment. Wait till the over exstended credit cards are totaly deliquent an unable to be paid.My daughter lost her job and has 30,000 in credit card debit WHAT DO YOU THINK IS GOING TO HAPPEN WITH HER CREDIT CARD ACCTS,? AND MANY OThER PEOPLE TOO?
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