Why the Fed's rate cuts won't help you

[Mountainman]

This By Jon Markman

In its efforts to keep irresponsible bankers on Wall Street afloat, the Federal Reserve is spurring inflation, crippling the dollar and cutting into retirees' incomes. And mortgages and car loans won't get any cheaper.



The Federal Reserve today continued its attempt to get out in front of the worst financial crisis to hit the world banking system in five decades by slashing short-term interest rates by three-quarters of a percentage point, to 2.25%, the lowest level since 2004.

But the Fed's effort will have little effect on the ability of the average American to get a cheap loan for a new home, car or college education even as it has a large effect on U.S. banks' ability to fix their balance sheets by racking up fat profits.

If that sounds unfair, welcome to the latest episode of a brutal new American business ethic, in which the government bails out bad bets by risk-taking banking executives in New York with money that it borrows from middle-class families and foreign investors. The effort is gilded with fancy financial language and cloaked in the guise of a rescue that helps all citizens, but the reality is that Washington is essentially robbing the poor to help the rich.

http://articles.moneycentral.msn.com/Investing/SuperModels/WhyTheFedCutsWontHelpYou.aspx

[Blackhatjack]

1. Obviously the rich cannot be expected to take losses without a Govt Bailout....

... and in this case, the affected entities are banks and credit issuers who BTW have raised interest rates and increased fees on consumers.

[whistle]

2. The Federal Reserve is just adding to hyperinflation by attempting to bail out

...the large investment banks

[poppysgal]

3. What"s new?

About the middle class getting the shaft? I do agree though that the fed rate cuts won't help us "little people" out here. For us, everything just keeps going up, up, and away.:cry: