printReports the Wall Street Journal:
“The world’s major central banks banded together Thursday to flood global money markets with massive amounts of U.S. dollars, in hopes of taming a major source of the tensions rocking the financial system.
[Global Power Boost chart]
In a concerted move, the U.S. Federal Reserve said it will expand or introduce measures to shuttle dollars to major European central banks, the Bank of Canada and the Bank of Japan, so that those banks can provide short-term dollar funding to commercial banks. Officials in South Korea, Hong Kong, Taiwan and other markets also pledged to inject more money into their financial systems.
The central banks’ moves came in the wake of a meltdown in global financial markets as short-term funding markets seized up and investors piled into U.S. Treasury bills in an unprecedented rush to safety. Concerns about redemptions in the $3.6 trillion money-market industry — a key provider of liquidity to short-term funding markets — and rising strains in the banking system had sent short-term funding rates sharply higher Wednesday. …
The U.S. Fed boosted its U.S. dollar swap line with foreign central banks by $180 billion. (The swap line is an arrangement through which foreign central banks can get U.S. dollars from the Fed.)”
[Snip]
I’m no economist, but as a devotee of Austrian economics, I can’t see how more credit is helpful when the proper correction ought to involve a continued contraction of the hitherto orgiastic lending exuberance.
Ilana, you are not the only person who is devoted to Austrian Economics, and you are correct in your understanding of the situation.
I would say that after going through all schools of economics – including the dreadful Marxist doctrines – the Austrian one makes the most sense, especially from a foundational level.
I am also deeply rooted into math – my major is electronic engineering. But the neoclassicals get it wrong too much of the time because they don’t seem to care that people cannot be ‘measured’ in the same way atoms can, or the force of gravity.
What is going on here is a massive brain drain – we are seeing a near complete stupidity on a level that boggles the mind – not even regular economists understand what is going on with the economy right now, and it’s just as bad in the political realm, where liberals and conservatives pipe in sharing their hogwash idea of what is wrong, as if economics wasn’t an actual science; by golly, our political worldview explains it all!
The liberals say that these problems are because capitalism is in inherently unstable, and must be regulated. Pshaw! say the conservatives – the market is good, it’s just those damned GREEDY CORPORATIONS that are doing all of this bad stuff – we need more Christians and conservatives running businesses.
Meanwhile, people who have a clue are watching something that is akin to mass hysteria. The public school system has produced people who are so dumb that they dont even know basic economic law. They are more apt at telling me why whites oppress everyone than they are at giving me a basic explanation of a supply curve.
Total idiots.