Fed Officials Worried About deep Recession

[uscitizen]

Tuesday April 8, 6:46 PM EDT

WASHINGTON (AP) — Worries about a deep recession — not a shallow one — drove Federal Reserve policymakers to slash a key interest rate last month, meeting minutes show.

Even as the Fed battled in almost unprecedented fashion to stem a widening credit and housing slump, some members fretted over the possibility of a "prolonged and severe" economic downturn. It was in that environment that they voted — with two dissents — to cut its most important interest rate by three-quarters of a percentage point to 2.25 percent. That action capped the most aggressive Fed intervention in a quarter-century.

Some Fed policymakers thought that such a widening recession could not be ruled out given the "further restriction of credit availability and ongoing weakness in the housing market," according to the meeting minutes that were made public Tuesday.

http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=ap&src=601&news_id=ap-d8vtvcs80&date=20080408

 

[Good Luck]

If the feds had any brains, they'd be worried about an outright depression. And putting a band-aid on the situation by encouraging even more deficit spending with lower interest rates isn't going to do anything except delay the bad while inviting an eventual worse.

We have been buying on credit way too long, and it's got to come home to roost sometime. Way too much money is being spent on paying for the money we spent that we did not have. That money does nothing real for the economy. It just supports finacial institutions who push more credit on us that is good for us. If the money spent paying for past credit went instead to buying goods, the economy would be a hell of a lot healthier, and a hell of a lot more stable.

Debt cannot be shoved on tomorrow too many times. As it is, things WILL fall apart from excessive debt sometime soon. The sooner it does, the better. The longer we put it off with band-aid fixes, the worse the situation will be when things finally do fall apart.

People need to be encouraged to stop their deficit spending and do as much as they can to get themselves out of debt as quickly as possible. We have been crying for the government to balance the budget and develop a pay-as-they-go policy. Pay-as-you-go needs to be the watch phrase for individuals and families as well as for government. that is the route to a long term stable economy, even if it means eating a bit of dirt to get there.

 

[Topspin]

I'm buying oil companies, Chineese etf's, and agriculure etf.
Inflation is just starting to get the engine juiced, oh year real estate about right now.

 

[Diuretic]

I was listening to the radio in the car. Our over-inflated real estate market - and it is stupidly priced, far too high - is apparently going to drop considerably over the next 2 years. That should be good for me, I need to buy a house in the next two years - something semi-rural appeals.