Count on the U.S. Federal Reserve to “Save the Day”

A reader writes:

“Who cares?! Nothing matters. Banks should write as many risky loans as they can. No one will ever be held responsible because the Fed will always step in to save the day for the stupid banks, the stupider hedge funds, and the even stupider investors. You people at Markets and Money are still preaching and practicing the old fashion theory of responsibility. FORGET IT!! It’s passé! Dive in. Open a hedge fund. Start a mortgage brokerage service or a bank. When the crap hits the fan, the Fed will come in and take over for you. Write loans with no deposit, no appraisal and no income needed. Sell them to the Fed. Let the Fed stay up nights while you sleep cozy with your profits. The American taxpayers patience has no end, his pockets have no bottom and his bottom has no problem with being spanked for crimes he didn’t do.”

Indeed…we’re keepin’ it real here at the mobile Markets and Money headquarters. We checked this morning and found that central banks were continuing to put more money in the system. Keep that liquidity flowin’ and the party might keep goin’! On Monday, the ECB put up another $47 billion in loans. The bank of Japan put in more money too.

Meanwhile, Forbes warns, “U.S. Economy Faces Downturn Threat.” Of course it does. Economies have to take some time to breathe too. Unless all this new liquidity somehow manages to make the credit bubble bigger…and worse…a slowdown in credit should mean a slowdown in the economy later in the year.

Bill Bonner
Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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