Marvin Gandall wrote: > The traditional strategy of cutting interest rates to cope with a financial > crisis hasn't worked this time because the core capitalist countries no > longer dominate the global economy as they once did. The devalued USD > coupled with rapid economic growth in in China and other newly emergent > economies whose currencies are pegged to the dollar have sent food, energy, > and other commodity prices soaring.
maybe, but there's a problem more immediate which also prevents rate-cutting from working well: banks and similar financial institutions aren't suffering from a liquidity crisis (with obvious exceptions like IndyMac) but from bad balance sheets, i.e., a lot of assets turned out to be bad. They're intermittently refusing to lend and driving long-term rates (like the mortgage rate) upward even though short rates are down. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
