[monocle]

The Federal Reserve, in a dramatic effort to rev up a “disappointingly slow” economic recovery, said it will buy $600 billion of U.S. government bonds over the next eight months to drive down interest rates and encourage more borrowing and growth.

I recall how Bush was ridiculed after 9/11 for suggesting that people should go out and shop.

Low interest rates may be counterproductive. People that are saving for education expenses have to save more, people who are saving for a downpayment for a house have to save more, people saving for retirement have to save more and retired people have lowered incomes. If interest rates were to start moving up people sitting on downpayments waiting for home prices to drop further might start buying homes which might stabilize home prices or even increase their value thereby making homeowners feel more wealthy.

[PeterPrinciple]

Low interest rates may be counterproductive.

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Who is the biggest borrower? The govt can’t let the interest rate go up because the house of cards falls faster.