Posted on 02/26/2008 6:50:58 PM PST by Flavius
The Fed has two big problems confronting it right now, and it has to choose between them.
One is that the banking system is suffering serious damage from all of the crappy loans and derivatives that they own. The Fed is hoping that cheap credit will save them from collapse.
The second problem is the value of the dollar. Or ‘lack of value’ - the dollar has been plummeting against commodities and other currencies. Cheap credit will only make that worse.
Evidently the Fed is more scared of big problems in the banking system than they are of the dollar losing value.
Yep, no doubt. When and if banks, ATMs, cell phones, gas stations and credit card machines freeze, they will go into utter shock.
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