"Structured finance" has usurped the Fed's authority to create new credit and handed it over to the banks.
What's so destructive about structured finance is that it allows the banks to create credit "out of thin air", stripping the Fed of its role as controller of the money supply.
T he huge injections > of liquidity from the Fed have done nothing to improve lending > or lower interbank rates. It's been a flop. >
Recent estimates by industry experts say that Paulson's plan will only help 140,000 mortgage holders, leaving millions of others to fend for themselves.
The Fed has no magical powers and will not allow itself to be crushed by standing in the path of a market-avalanche. As foreclosures and bankruptcies increase; stocks will crash and the fed will step aside to safety.
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