Federal Reserve Eases Bank Reserve Requirements
This is actually good news, since everything else the Fed has done has been to benefit the insolvent large banks.
Still, I didn’t expect my post of three days ago to be such a perfect “negative indicator” so soon.
Ken,
I don’t understand why lowering reserve requirements would make any difference when demand for capital has been on a downward trend for years. Millions of consumers have had their credit status downgraded. And the world is awash with dollar liquidity from our ‘spillover’. Emerging nations are finding it necessary to use capital controls to deter dollar-based carry trades from driving up the value of their currencies. Hard commodities have risen 10% over the past 60 days while stimulus funds are drying up the world over. Producers are running at less than full capacity and etc. So what good are lower reserve requirements when supply is already so much greater than demand ?