LAST EDITED ON Nov-08-10 AT 02:05AM (MST)[p]"Get back to me in 6 months and ask the same question" The only question I asked of you was a hypothetical about lending....and it went unanswered.
QE-this, QE-that, Quantitative Easing is simply a new way of saying printing money so the Fed can pump-up the economy. On that note this is really more like QE-23 or something.
We basically are in agreement although perhaps we are viewing the issue from different angles.
I was extremely disappointed that Obama kept Bernanke on as Chairman because I can't think of a single instance where this guy has ever been correct......about anything.
Unfortunately, though, what's the alternative response to a credit crisis like this? Continue limited liquidity, cut-off what little credit is available to struggling small businesses by strengthening the dollar and making our exports less competitive?
Why can't there be agreements on the purchases of MBS, like, "Hey, we'll buy your crap to clean up your books and continue to give you money at 0% interest however you'll need to increase your lending by x% within the next 90 days after purchase. Or you can keep your toxic junk and we will start charging you 1.5 points on any funds received from us. Basically you better start playing ball or we'll find somebody who will and you'll go out of business from all toxic loans on your books.
Now many might say pushing the banks to make loans will take time. However, there are countless companies that would just love to have their bank tell them, "Hey you know we cut you off and closed your 100K line of credit, well, we're reinstating it again" that's a pretty quick process and strengthens those that have survived the last couple of years. Keeping them strong will at a minimum provide a stable platform to build off of.
As for the states you may only have to wait a couple of months instead of 2 years. At the end of the year the states will have to start paying interest on monies borrowed to cover their unemployment funds.
http://www.economicpolicyjournal.com/2010/05/32-states-have-borrowed-from-treasury.html
I'm sure somebody will think up some flowery name for a vehicle to create zero interest 100 year Fed-State bonds which government number crunchers will somehow tally as being real so the books look like their accounted for.
If it all fails and the house of cards tumble down it will happen quickly...like in a 48-72 hour period. But there is a bright side, we are all experienced outdoorsmen, plenty of gear, plenty of bullets, so all is not lost....non-hunters that live in major metros might have a problem by day 7. Never know, like anything it could happen, best to have a plan and a place should that day come if you know what I mean.
