“3/18/2008, 3:18pm EST”
Fed cuts rate AGAIN (3/4 points) →
“The Federal Reserve slashed a key interest rate by three-quarters of apercentage point Tuesday, in the central bank’s continued effort to restore confidence in the economy and battered financial markets.”
The (shit) show must go on, apparently.
By lowering the Fed Funds interest rate, the Fed is hoping to accomplish two related things: (a) make it easier to borrow, especially for corporations; and (b) “restore confidence” in the markets.
To see the lunacy of this, let’s remember the immediate causes of this crisis: borrowing was too damn easy, and both lenders and borrowers were too damn confident. The solution devised by the ingenious stewards of our economy is to attempt to recreate exactly those conditions.
Hence, lowering the interest rate can only exacerbate the problem in the long term, whether or not we are allowed to peak behind the veil. The powers that be are literally begging people to keep buying into debt — and into the line that this problem can be solved by thinking in the exact same ways that got us to this point.
Of course, we didn’t get here by seeing the big picture. With broader vision and understanding, this stage of a long-festering crisis could have been a turning point. Instead, our leaders fear change — of mind, philosophy, and policy.
Never leave home without it.
