Current Events — HabitableZone

Current Events » in reply to In spite of props, Dow drops 1.57% today.

A quick econ education

The Fed has historically provided liquidity to lending institutions when there have been cash crunches. This is not an aberration. In fact this "prop" is smaller than many others in the past. It's not socialism either. For capitalism to exist efficiently on the scale it is today there must be monetary policy outside banks' control. It would in fact be immensely irresponsible for the Fed to let a crisis occur when a mere $40B could prevent that.

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