Friday, April 1, 2011
Foreign Banks Tapped Fed's Lifeline Most as Bernanke Kept Borrowers Secret
For grade on 8 Apr 2011. OMG....What is going on???!!!??? Why would the Fed consider helping other countries when we have our own problems? What is the Federal Discount Window and why are other countries using it???
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Foreign banks are borrowing more and more money from the United States. In October 2008, 70% of the $110.7 billion borrowed. The Fed would consider helping other countries by we may depend on those other countries. Therefore, if we support other countries, we may benefit ourselves. The federal discount window is the Fed's primary program for providing cash to banks to help them avert a liquidity squeeze. Other countries are using it to help them avoid liquidity on their assets.
ReplyDeleteTrade is one of the biggest ways we can boost our economy. If foreign countries all go bankrupt, we have no one to trade with. Therefore, supporting foreign nations can actually serve to benefit us. According to the article the discount program is the Fed's program to provide cash to banks in order to avoid a liquidity squeeze, which could result in an international economic crisis.
ReplyDeleteOne of the first things we learned in economics was that we can survive more easily by trading and therefore interacting with other countries. If countries can't sustain themselves soon we will have to find other places to engage in trade. The Federal discount window is the program trying to stop an economic crisis had countries all of a sudden want their money, or liquidate their assets.
ReplyDeleteThe Fed would consider helping other countries by providing them loans because trade is essential, and countries have to have money to trade. By the Fed loaning out money it can serve to aid us, by increased trade. The Federal Discount Window provides cash to banks to help them avert a liquidity squeeze, as the article said. Liquidity squeezes are "credit crunches" where the ability to receive loans becomes harder. Why other countries are using it, I am not sure.
ReplyDeleteThe idea of helping foreign banks with their problems stems from the whole idea of trade. Trade is a major proponent in a thriving economy, espcially the U.S.'s. If the United States assists foreign banks then the effects could benefit our economy as a whole. The Fed's discount window is when they borrow money from the central bank in order to meet any shortages of liquidity.
ReplyDeleteAs several people have said above me, trade is necesary to run an effective open economy. Otherwise, we might face an even greater economic disaster than the one we're currently in. The Federal Discount Window provides cash to banks to help them avert a liquidity squeeze. I am sure other countries are using it for a very good reason.
ReplyDeleteTrade is one of those most effective ways to boost our economy today. By exporting more than we import we are essentially raising our own GDP which will benefit us. If the other countries go bankrupt then they can't trade with us which will plunge the world deeper into the economic crisis occurring at the moment. The federal discount window aids foreign countries by supplying them with loans and preventing a liquidity squeeze.
ReplyDeleteThe Fed benefits from helping out other countries because loans (eventually) get paid off, they will have a better economy to buy our stuff and engage further in trade. The Federal Discount Window provides cash to banks to help them avoid a "liquidity squeeze" which is a "credit crunch" where the ability to receive loans becomes more difficult. Other countries are using it obviously because they need it. Other countries have very unstable economies and need to have a protection plan. It may seem to not make sense in the short run, but in the long run they feel its better than the risks of not using it.
ReplyDeleteWe learned at the very beginning of the year that when two countries trade, they become more efficient. Knowing that trade benefits our economy, the reasons for helping other countries become obvious. If they go bankrupt, so do we. The purpose of the Federal Discount Window is to loan money to banks in order to avoid a liquidity squeeze. Other countries use it to prevent liquidity of their assets.
ReplyDeleteThe Federal Discount Window is a program where the Fed is able to provide cash to banks in hopes of avoiding a liquidity squeeze. The Fed is helping out other countries because there is a payoff. When you invest or hold ownership in a stock, dividends are received as a paid profit. When banks give out loans profits are made on investments. Similarly, countries invest or loan money to other countries for similar reasons that appear profitable.
ReplyDeleteAccording to the article, the Federal Discount Window provides cash to banks to help them avert a liquidity squeeze (a shortage of cash). The Fed is helping foreign countries despite our own domestic problems because of trade. If all the other countries become strong enough to trade with the United States, then the US will in turn profit immensely and experience economic growth.
ReplyDeleteIn order to start the flow of money in this economy, someone need to give out loans and someone need to borrow the loans. Once money starts to flow, trade can take place, create jobs, and more investments. This is an example of expansionary fiscal policy in which increase in government spending will narrow down the recessionary gap. Once the economy of other countries improve, the U.S can take back the loans with interests.
ReplyDeleteThe fed has considered helping other countries because of the nature of the worlds economy. As you know fair trade makes everyone better off. In a situation where a country would fail, we would no longer be able to buy goods from that country and they would no longer be able to buy goods from us making us worst off. Perhaps the small cost of helping other countries is worth it for not just ours but the worlds economy.
ReplyDeleteThe Fed has considered helping other countries because of the benefit that there is to be gained by trading with them. If a country fails then we lose their business in both imports and exports. The Federal Discount Window provides cash to banks to help them avert a liquidity squeeze. Other countries are using this to help them in times of liquidity concerns.
ReplyDeleteThe Fed helps other countries so that they can keep trade going. Trade is very important to keeping our economy stable. So, if other countries don't have money to export or import, then our country will fall behind and our economy will fail. Our country will profit if other countries trade more with us. In the end, the U.S. will earn back all the money they gave out to these countries through trading with them.
ReplyDeleteAccording to the article the discount program is the Fed's program to provide cash to banks in order to avoid a liquidity squeeze, which could result in an international economic crisis. we need to help out other nations because when we help other nations they are likely to put money into our economy through investments, or buying our products so by helping out other countries we are helping our own economy as well.
ReplyDeleteThe Fed helps other countries so that trade can continue to exist between America and other countries. The more people that accept the dollar as a currency the stronger the dollar gets. So why not throw them a few billion if it means the networth of our currency goes up in value. It means that America can and will be able to buy more.
ReplyDeleteThe article explains that the Federal Discount Window provides cash to banks to help them avert a liquidity squeeze. This means that the countries will have their assetts in cash and in a more readily accessible manner. The reason our country is helping foreign nations is simple- trade. Especially since our economy is having trouble, trade with other countries is not only vital but lifesaving. We need to be able to sell our goods to other countries in order to make a profit and also buy certain goods from other countries. Trade also keeps the dollar at a high value, since it is being utilized so frequently. All in all, the world market of production relies on trade and there comes a time when countries need to help each other out.
ReplyDelete