"We continue to read articles in the financial press and elsewhere by widely-respected mainstream economists who have a tendency to quote mindlessly from Keynes’ masterpiece “The General Theory of Employment, Interest and Money”.
They couldn’t be further from the truth, however, when they claim that the current credit cycle liquidity problems can be corrected with a little fiscal stimulus and cheap money to jumpstart the ailing economy. It is not liquidity that is preventing the money from flowing; it’s insolvency! The banks won’t lend to deadbeats anymore! HELLO! Sure, cheaper money helps high credit score borrowers refinance and pay less in interest charges, but cheaper money does nothing for the existing bad loans backed by No Income, No Collateral, and No Character..."
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