Monday, January 17, 2011
Small business lending to increase, regulators say
this article talks about how the FED chairman Ben Bernanke expects 2011 to be a much better year in terms of economic stability. it mentions that the banks are starting to give out more small business loans to due to the improving credit situation in the US. This could put an end to the banks keeping large amounts of excess reserves and it could provide more money for further investment in the local markets. Bernanke also mentions that he expects retail sales grow more in the new year, but he still believes it will be some time before the unemployment rate decreases to a point were we can be comfortable.
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2 comments:
More money is good, but this is also kind of bad because it could lead to very rapid inflation. Strange because some people are currently worried about deflation, but if all the banks reserves are given out in a short period of time we could potentially see a bunch of inflation.. dun dun dun
I agree with what Adam said. It seems like these moves will cause inflation big time. I think we all want to see the unemployment rate decrease, sales to grow and the ability to use more money to invest in markets. People have to have high expectations, like Ben Bernanke, in hopes that our economy will grow and become more stable. What the banks are doing by giving out more loans to small businesses to improve the credit situation is risky, but in today's society why not take the risk to possibly improve the economy now, in 2011.
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