Lenders’ Belt-Tightening Stifles Growth in Economy

Source: NY Times

Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.

The combined value of two leading sources of credit — outstanding commercial and industrial bank loans, and short-term loans known as commercial paper — peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent.

Not once in the years since the Fed began tracking such numbers in 1973 has this artery of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975; at other times such declines tended to occur in conjunction with an economic downturn.

Policy makers at the Federal Reserve are growing increasingly alarmed about the problem, which is an outgrowth of the woes of the housing and mortgage industries. Just yesterday, the Fed’s vice chairman, Donald L. Kohn, said that the latest market turbulence appeared to be reducing credit to businesses and consumers, hinting that the central bank, in response, was prepared to cut interest rates further.



Read more: http://www.nytimes.com/2007/11/29/business/29lend.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1196313417-9x8kxvu5gKE3fjAat9kKQQ

Lowering interest rates isn't going to solve anything if the
flow of credit, even to credit worthy clients, is turned off so
quickly.

Then they can announce the austerity measures that cut everything social and only save the military, police and prison spending. Welcome to the New World Order.

So where are all the billions the Federal Reserve is loaning the banks going? To the banks. And they are using it to stay solvent. Or at least give the impression they are solvent on their cooked books.

They are borrowing more and lending less. Abu Dhabi bought 11% of Citibank. A final warning that I doubt anyone will pay attention to.

We no longer have an economy to speak of in this country. It is all debt at this point. And sooner or later someone is going to "call the loan" and we may see another Great Crash followed by another Great Depression.

And the sad thing is even if Bush wanted to even he cannot stop what is happening. No one has any authority over the Federal Reserve. Which is what the Rothschilds intended when the Federal Reserve was created.

The purpose of these central banks is not to ensure one nation's economic security. The purpose is to ensure the economic security of the banks themselves. When a bank fails the Federal Reserve is the sole "secured creditor."

Bad times are coming.

We're in stagflation. If they support the greedy mistakes of the "free" market, inflation will soar and the dollar will be worth a penny. There are no good choices here. NONE. They've done to the economy what they did to Iraq.