Martin Weiss' Safe Money Report Home Store About Us FAQ Martin Weiss' Safe Money Report Make A Wish Martin Weiss' Safe Money Report Martin Weiss' Safe Money Report
Martin Weiss' Safe Money Report Current Issue and ArchivesRatingsInvesting BasicsSample Issue Martin Weiss' Safe Money Report
Daily News & Commentary    Login  help  contact us   New User Registration

> Welcome
> Daily News
> E-Services
> Subscribe

Rate Cuts Still Not Helping
-- November 28, 2001

The Federal Reserve has all but admitted that its 10 rate cuts over the past 11 months have not revived the economy. In fact, the Fed said its "beige book" revealed that, despite some of the lowest interest rates in history, banks are issuing fewer loans.

That's because Corporate America and John Q. Public are up to their eyeballs in debt already! Corporations can't afford to go deeper into debt while their sales and earnings are virtually non-existent. Americans -- who currently owe a collective $7 trillion in credit card debt, mortgages, auto loans, and more -- aren't in a position to take out new loans, especially when they are worried about job security.

And even if they want to borrow more, the beige book revealed that banks are tightening their credit standards for lending. Banks are already hurting from the slew of bad loans they made during the past decade of supposedly "never-ending" growth. And with bankruptcy filings on a record pace, according to the American Bankruptcy Institute, banks are trying to guard against future loan delinquencies.

Clearly, the economy is not showing any signs of climbing out of its current recession. And it's doubtful that further rate cuts will help.

related article: Fed: Economy Stayed Soft Oct., Early Nov

printer-friendly format  printer-friendly format

Archive of Daily Commentary: select a past article from the box below.

Return to Today's Commentary

Copyright © 2002 All Rights Reserved
privacy policy & cookies :: terms of use