Posted on 05/06/2008 1:45:28 AM PDT by RSmithOpt
WASHINGTON (MarketWatch) -- In this downturn, the Federal Reserve is fighting on two interrelated fronts simultaneously, battling to keep the real economy growing and to revive the credit markets.
The Fed has won some victories on both fronts. A serious recession has been prevented so far, and the worse fears of a systemic credit meltdown have been put to rest. However, if health isn't restored to the credit system, the downturn could worsen.
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(Excerpt) Read more at custom.marketwatch.com ...
Even when the banks decide to hand out money again, the average US consumer will not have much for discretionary spending because of gasoline, energy, food and medical inflation.
This in turn will further the economy cooling.
Retail, travel, entertainment, and savings/investments will be seriously affected.
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