Does interest rate cut + fund injection really helps?

peterloo · 03-18-08, 07:52 AM

As all we know, the USA economy is in a deep peril of getting into a recession, after the subprime mortgage crisis

The USA Fed has already cut interest for several times, but none of them, was really effective. The news of a sudden cut, boosted the stock market price for a day, but the price soon starts falling again since people is doubtful in regard of the effectiveness.

They also injected funds into the market, hoping to bring a new life to the dying economy

So, does a interest rate and fund injection really helpful in stimulating investment and halt the economic turnmoil, as what the economic books says, or just desperate attempts which never pays offs?

Yahoshua · 03-18-08, 08:16 AM

In all honesty, the best course of action would be to sit down and let the economy take care of itself.

People are panicking over a normal cyclic fluctuation of the economy. Mainly that it has highs, a low, and then goes up again.

As for some aspects however (particularly oil), that is more or less the fault of OPEC artificially inflating prices and speculators who are trying to raise their stock index on the market.

The stockpiles of oil have never been higher before, but this is counter-intuitive to the rise in oil prices.

03-18-08, 07:52 AM	#1
peterloo Commander Join Date: Sep 2006 Posts: 462 Downloads: 2 Uploads: 0	Does interest rate cut + fund injection really helps? As all we know, the USA economy is in a deep peril of getting into a recession, after the subprime mortgage crisis The USA Fed has already cut interest for several times, but none of them, was really effective. The news of a sudden cut, boosted the stock market price for a day, but the price soon starts falling again since people is doubtful in regard of the effectiveness. They also injected funds into the market, hoping to bring a new life to the dying economy So, does a interest rate and fund injection really helpful in stimulating investment and halt the economic turnmoil, as what the economic books says, or just desperate attempts which never pays offs? __________________ Romeo is here, but where is Juliet? The 中国水兵 (Chinese Sailor) in subsim

03-18-08, 08:16 AM	#2
Yahoshua The Old Man Join Date: May 2006 Posts: 1,493 Downloads: 0 Uploads: 0	In all honesty, the best course of action would be to sit down and let the economy take care of itself. People are panicking over a normal cyclic fluctuation of the economy. Mainly that it has highs, a low, and then goes up again. As for some aspects however (particularly oil), that is more or less the fault of OPEC artificially inflating prices and speculators who are trying to raise their stock index on the market. The stockpiles of oil have never been higher before, but this is counter-intuitive to the rise in oil prices. __________________ Science is the organized unpredictability that strives not to set limits to mans' capabilities, but is the engine by which the limits of mans' understanding is defined-Yahoshua