Reason #9: The Fed can't do it either

Posted Oct 25th 2009 12:00PM by Michael Shulman
Filed under: Federal Reserve, Recession

Reason #9 the economy won't recover in 2010 Historically, the Fed has lowered interest rates to spur spending and investment.

Well, the Fed has already cut interest rates to banks down to essentially zero. The media are screaming about potential inflation due to the trillion dollars the Fed put into the system, but that trillion has simply replaced the trillion written down by the banks, which have another trillion and a half in write-downs to go.

What's more, the banks are hoarding cash to rebuild broken balance sheets rather than lending it to people. This will continue in 2010 and beyond.

In the meantime, here are seven ways you can hedge against inflation.

Next: Reason #10: Take a good look around

Tags: economic recovery, end of recession, interest rates, Michael Shulman

Print this

Reader Comments (Page 1 of 1)

10-24-2009 @ 1:00PM

benedict arnold said...

This is hilarious, now Uncle Sam is on welfare. I'm glad, You can't keep giving away other ppl's money. I can't wait till the day the fed government goes completely broke. Then we can begin the healing. Stick to the constitution and everything will be fine. The federal government has 17 enumerated powers, nothing more. I realize ppl are hurting, but bringing everyone else pain and suffering is not the answer. Go ahead and flame me, this country was founded on individual rights which we are losing more of on a daily basis. If the dims think they're gonna rule this country by buying all they're votes they got another thing coming. Go ahead and raise taxes and I'll bet your revenues will shrink even more.