The plan by fed to issue Fbills to buy Tbills thereby print money was discussed, but never implemented. It has far too many negatives associated with it.
Banks will not be in a hurry to lend. Asset values aren't simply a function of how much banks will lend, they are also a function of their economic value which in recession will be much less than during boom times. So yeah banks will eventually lend, but that won't be happening for a long time. The large US banks are technically insolvent at the moment so they won't be expanding their balance sheet too much.
Any lending done will not be against assets that are falling in value either.
All I'm saying is that people expect everything to be nice and toasty in 6 months time. I don't see any reason for this unbridled optimism.
BNB
babcock & brown limited
