Yesterday the markets just exploded and ALL the pundits are so confident that this is the beginning of an explosion on Main Street, that prosperity is returning….but is it?
The rally was touched off late Wednesday by the announcement by the Federal Reserve Board that it would pump another $600 billion into the financial markets over the next eight months through the purchase of Treasury bonds. It was further fueled by signals from the White House that the Obama administration is about to capitulate to Republican demands for an extension of Bush-era tax cuts for the rich.
A headline on CNNMoney’s web site summed up the Fed’s action as a “$600 billion gift” to Wall Street. The US central bank is ensuring that corporations and banks have easy access to low-cost funds, even while working people and small businesses find credit unaffordably expensive, if available at all.
So this is basically a ‘hail Mary’ pass…..the Fed has little options left in its bag of tricks to stop a downward spiral of the economy….this action helps NO one but those thieves on Wall Street that have had nothing but good fortune during this economic crisis….the government has done everything it possibly could to keep these firms above water……none of this will increase demand….it does however make the liquidity of the firms involved more stable….but I do not see why this would do anything to help the economy recover…
How will this help anyone with their problems with jobs, housing or whatever else afflicts the common person?