global economy question...

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I am a dummy when it comes to economics. But I try to understand if I can-and I have always been interested in the bigger picture and how it might affect us.

Okay so today I read that because of possible (no one is saying for sure of course) consumer etc lack of confidence and world markets being unstable due to the terrorist atacks in the US, that the fed is giving 50 Billion to the whatever to stablalize the global economy...and that there is speculation that interest rates will go down again-even possibly before the scheduled meeting in 10-2.

sounds like a nice thing for the government to do...but it brings up all kinds of questions for me. First off-with our economy having it's own troubles...can we affor this (not that it matters it is done) and just how is this going to help? It seems ludicrous that we, after being hit so hard here Tuesday, and our own economy having its troubles, that we are the ones who come forward with a HUGE (or at least it is to me-maybe it is all that fake money -can't think of the word it is called-where there really is no money backing the figures) gift to the world.

does that seem backwards to anyone else? what does this mean for us (yeah I know only time will tell) ? can anyone explain this in an easy way for someone who isusually ony concerned about keeping the animals wherethey are supposed to be, and getting the canning done.

Thanks, Sarah

-- Sarah (heartsongacres@juno.com), September 13, 2001

Answers

I know this is very off topic-and maybe someone could point me to some links or something before it gets deleted...sory to be off on a bunny trail with this-but to be honest I can't think of a better place to ask this sort of question-we have some real wisdom and common sense here! :)

Sarah

-- sarah (heartsongacres@juno.com), September 13, 2001.


Giving away our money certainly doesn't make sense, and it certainly needs to be stopped. ASAP.

The particular action you refer to, however, may be money made available to Central Member Banks (American branches of the Federal Reserve Bank) at least that's what I am hoping.

-- Rick#7 (rick7@postmark.net), September 13, 2001.


I'm certainly no financial whizz but as I understand international monetary system 101, the concern is that the economy is only as strong as the confidence individuals (whatever their monetary assets) have in the banking system. The concern is that given these destablizing events people around the US and the world will begin to withdraw money from banks and put it under their beds or whatever. This could escalate and cause signficant liquidity problems for the banks. The banks can then no longer extend credit to consumers, lend money to businesses and in fact start calling in loans. This leads to business collapse and less money moving in the global system, and so the downward spiral to depression begins. All of the central banks around the world are currently injecting money into the global markets to ensure sufficient liquidity to forestall any problems. Or at least that's the theory. Bottom line - hope that everyone keeps their money in the bank and stays confident in the system.

-- DavidL from Mass. (owlhouse2@cs.com), September 13, 2001.

Just a week ago President Bush was asking to tap social security for $20 billion to make the budget. Then hold "closed" sessions to discuss what to do about social security. I like that -- "closed" sessions about our money that we worked for and had to turn over to Uncle Sam and we aren't invited to even know what is doing on.

So I'm no rocket scientist, but I don't think they just print it up as needed--- its coming from somewhere! I'm willing to bet that for one they will be wanting that $600 tax refund back that they just gave us all..LOL! Some how I thought our President, Congressmen, and Senators worked for us???? Guess not, eh???

-- Karen (db0421@yahoo.com), September 13, 2001.


I'm always intrigued by comments like "the money we worked for and had to turn over to Uncle Sam". We live in a society with a government and a strong social compact. We give our money to the government in return for improvement in the common good. National defense, clean water, securities regulation and disaster relief are all paid for with our taxes. We don't always agree with all decisions made by government and there are certainly good and bad governments. And periodically we get to change them. But without taxes and government we would have chaos and I for one would rather pay the taxes!

-- DavidL from Mass. (owlhouse2@cs.com), September 13, 2001.


Sarah, I heard this reported on the radio as I was driving, so I don't know if I understood or not. But, my take on the Fed "giving" the money, was because of Wall Street being shut down, the usual flow of money was distrupted, hence the Fed stepped in. Not sure, just what I got from it.

-- Annie (mistletoe@kconline.com), September 13, 2001.

I cant understand you high class educated people..Here we have been attacked by some unknown power, thousands killed , large buildings destroyed, Airplanes hijacked, and all you scn do is cry about money and taxes . I just dont understand you crybabies , Stupid old country boy Big George

-- George Wilson (cwwhtw@aol.com), September 13, 2001.

David, I am sorry, I think you misunderstood. I was talking about social security which was established for our own use and benefit for retirement, loss of ability to work, support for our children if a parent is disabled or dies. I have no problem with paying income taxes and believe, in spite of how sometimes it is used, it is our civic duty to do so. But point well taken on your end!

-- Karen (db0421@yahoo.com), September 13, 2001.

Hey George,

I am sorry you think I am a highly educated whiney crybaby-I didn't mean to come across that way, but in reality-life is going on for us and it must. I am so sorry for hte familie of the thousands hurt and killed by this atrocity-but for those of us that are left, like it or not, money, taxes and the economy are facts of life.

Maybe it was insensitive-and for that I am sorry-I probaby should have waited to ask. please forgive me.

Though in one respect you have to admit-that the roosters still cprw and the cows and goats stillhave to be milked, and children stillneed noses wiped or diapers changed-and those of us here have to do things like eat and drink and sleep...our lives have been affected I am sure in some ways we can't even fathom right now.

To the rest of you-thanks-I still wonder how this can help-but with the stock markets etc still closed- I do see that in a global economy a big player stepping down does have huge impacts across the entire world...

Thanks guys-I maynot completely undrstand this-or ever agree with it, but I guess there isn't much I can do aboutit either except keep on keepin on.

Sarah

-- sarah (heartsongacres@juno.com), September 13, 2001.


Karen, thank you-I agree. And George, Sarah's right. Life in all its complexity will and must go on. We are all deeply shocked, saddened and even frightened. But if we let this horrific event dominate our lives we risk becoming no better than our enemies. We must try to hold on by celebrating the small things in life, finding meaning in the everyday, and being thankful for the love, kindness and innocence that abounds in the world still. To do otherwise is to surrender to evil.

-- DavidL from Mass. (owlhouse2@cs.com), September 14, 2001.


Sarah,

I was wrong in the assumption in my initial post. I've just read a news item saying the US Fed is making $50 billion aavailable to European banks to help them out. This really does seem wrong to me. You were correct.

-- Rick#7 (rick7@postmark.net), September 14, 2001.


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