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Will More Fiscal Easing Help The Situation In The US?

It seems as though Ben Bernanke, the Chairman of the US Federal Reserve, thinks that more fiscal easing will help the situation in the US and start to create a turnaround. Things are already as low as they have been in years in terms of interest rates, but they can apparently go even lower

What the Fed is trying to do is make it so cheap to get money that riskier assets will seem like a good buy, they will rise in value, and will restore confidence in the system. This, in turn, will create a domino effect and start to bring up the value of other assets. It is a potentially risky strategy, but it may be effective.

At the end of the day, the Fed alone isn’t going to be able to fix this situation by themselves. They are trying everything they can and taking action, which is commendable, but until the administration in Washington decides to stop playing political games and actually start getting things done, the Fed will just be spinning their wheels and trying to maintain the current situation. People may not like what Bernanke is doing, but at least he is trying something – that is more that can be said for the Democrats and the Republicans.

 

Still No Agreement Between Germany And France – Sarkozy Odd Man Out?

It has become clear that one of the final hurdles that must be cleared when it comes to the design of the EU rescue plan is the leveraging of the EFSF and the mechanisms behind it. France has their own idea of how it should be done, while Germany and others seem to have other ideas.

This impasse has forced another EU meeting to be called for next week, where hopefully a solution will be found. But, based on recent reports, it seems as though French PM Nicolas Sarkozy is the only one who is standing behind his plan and is getting resistance not only from Germany, but most other EU nations as well.

This could be a good thing, though – if France is the only one who is pushing for their idea, there is a good chance that they can be persuaded to make a compromise for the common good. If the EU nations were equally divided, it would be a different story, but that’s just not the case.

Hopefully, there will be an agreement made soon so action can be taken and the EU can get back on their way to prosperity. Since the main negotiation points now are pretty much minor details, that should mean that most of the major framework is already complete and agreed on, so once this issue is taken care of, action will be swift.

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