From AOL DAILY FINANCE:
When Chairman Ben Bernanke and the Federal Reserve’s rate-setting Federal Open Market Committee (FOMC) meet Tuesday and Wednesday, they’ll face some daunting challenges. The economy is unquestionably weaker — the U.S. Labor Department reported a net loss of 131,000 jobs in July — and the threat of deflation is getting scarier. Faced with these concerns, what’s the Fed likely to do? Actually, what can it do?
The Fed’s options are somewhat limited because it has already adopted a zero-interest rate policy because the rates it charges banks are already set at their lowest possible point of between 0% and 0.25%. Interest rates can’t go any lower, so further easing of rates isn’t an option…
Quantitative easing was first used by the Japanese government to try to reverse stubborn deflation during the 1990s. It has also been called printing money…
Click here to read the full article.
EDITOR’S COMMENT: Ease all they want with low interests rates and expanding the money supply, unless people are working and making good money, demand for goods is not going to increase. To get out of this deep recession, we need government spending, not government lending.
