Friday, November 5, 2010
$600 Billion for the Banks
Now the Federal Reserve is going to release $600 billion in low interest loans to the banks. This is eerily similar to the TARP money (which the President is still blamed for, he was a Senator). Remember the TARP money had as a stated goal that the money would go for low interest loans to business for job creation. The goal with this money is to provide low interest loans to businesses for job growth. Interesting! The problem as I see it is that in 2008 a lot of businesses needed cash to keep the doors open and the banks didn't follow through on their end of the bargain leading to these businesses going under. In 2010 there is no pressing need for capital, the damage has been done. If there were increasing demand from consumers increasing the supply of money would make sense, but that is not the case at this point in time. This is looking like another give away to the banks. Until we can get people working again or salaries going up to create demand there is no need for business to expand.