The new interest rate is the dollar overnight index swap rate plus 50 basis points, a half percentage-point cut, and the program was extended by six months to Feb. 1, 2013, the Fed said today in a statement in Washington. The Fed coordinated the move with the European Central Bank as well as the Bank of Canada, Bank of England, Bank of Japan, and Swiss National Bank. (SNBN) (Source: Bloomberg)
The global central banks seem to have decided to solve the problems we are facing with more liquidity.
But the problems of Europe are structural - and I am thinking about Italy, Greece, and Spain in particular. These countries cannot compete in the world markets. They cannot survive by just borrowing money.
The problems remain - solidly in place. Because the power structure of those countries will do anything to maintain the control of those economies. The little guy is going to pay the price. As usual.
Is reflation the solution of the global credit issues?
More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest
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