Tuesday, October 07, 2008

Coordinated interest rate cuts

There is speculation in the financial markets that the central banks will have a coordinated interest rate cut to help the financial markets.

The chance of this happening is high. Inflation has dropped. Economies are entering into a recession, which will bring down inflationary pressures. The coordinated action means that several countries will be cutting interest rate together, at almost the same time.

Over the longer term, the global financial system needs to be revamped. It is bad to have extremely high leverage. There must be controls over the amount of debt that businesses are allowed to pile up. The control has to be stricter for financial institutions.


Anonymous said...

deflation is bad, very bad. Inflation is not bad if it is controlled

ym said...

thats what the bankers and central bankers have feed into the public's minds...

they have managed to conn everyone into believing small inflation of 2-3% over last 10 years..

thats a lie, inflation was super high,.. printing money out of thin air is NEVER good..

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