Ok, so the big banks are being taken care of. Whatever they need to stay afloat, Daddy Paulson and his team of merry “asset managers” will provide. But will Bernanke’s billions, hot off the presses, be enough to thaw the credit freeze? This speculator’s money says decidedly not.
Replenishing bank vaults is one thing. Lending is another. The former is a cinch: print money or sell bonds, exchange cash for crap, and voila, the banks are made whole again. To actually get that money flowing, you need creditworthy borrowers with good collateral to step in and ask for loans. With families and corporations struggling with the debt they already have, while their assets are dwindling, who out there is both worthy of credit and daring (or dumb) enough to ask for more debt?
Just like the olden days.
Deflation is largely about mindset, and there is nothing that can or should be done about it. Prices need to fall and habits need to change if we are going to stand on solid ground again. Fortunately, the shift comes instinctively.
This weekend, the front pages of the online editions of Wall Street Journal and the New York Times featured articles on how to economize in small business and household budgets, respectively, and the same theme is all over television. It is amazing how fast the spendthrift mentality is fading away. Are we going to see pot luck dinners and Mason jars make a comeback?
Image from villagekitchen.com
The current bailout plan the Obama administration has somehow contribute in lessening the effects of economic global crisis to everyone. Maybe in due time, the economy will bounce back to where it should be.
Who are you, linking to a site like that, some shill on the bureaucratic payrolls? Everything the Bush and Obama administrations and Congress have done will make this depression deeper and longer. It would already be half over were it not for their meddling.