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Fed Chairman Ben Bernanke pulled out the last topic in his toolbox reaching straight back nearly 50-years in a wish on the economy that just possibly this "silver bullet" will destroy the strain of extra debt recently. Unfortuitously, gold bullets don't kill vampires. There's more for this example than simply the approaching Halloween time. Our problem isn't low-interest rates - it's extra debt which actually empties the need for more credit. As companies mentioned that acces to credit isn't a problem the current launch of the NFIB Small Company Survey revealed this. "Poor sales" are their number 1 problem and the possible lack of need on their companies don't guarantee putting on more influence. How many companies currently considering it is a time to expand" reaches a few of the lowest levels on record. Similarly, customers, want to pay down debt as concerns about job security, increasing food and energy prices and stagnant wages reduce their need to make debt decrease and eat up important. Huge pools of available credit were provided and the extra debt that's been gathered over the last 30-years as rates of interest were in a continuous decrease, financing requirements were paid off has now started the inevitable unwinding process. Bill wrongfully thinks that by reducing interest rates on longer old maturities it'll reduce long-term interest rates improving investment in both company and property. The truth is that interest rates are currently at levels two times as low because they were the last time "Operation Twist" was applied and if the cheapest rates in 50 years aren't spurring a need for credit in the economy - it's unlikely that an additional decrease can do the trick. Throughout the past "Operation Twist" the economy was experiencing a tendency of development. Interest rates were also gradually increasing as stronger economic development allowed for higher rates of interest to be charged. Debt, like a function of GDP, remained well restricted at minimal structurally manageable levels. Nevertheless, from 1980, and the economy moved, once we have mentioned in several previous sites and a very steady descent was begun by interest rates. This decrease of rates of interest generated an enormous growth of debt which fundamentally sowed the seeds for decreasing rate of progress in the economy. The problem how is that people have entered in to the "Japan Syndrome." Nearly 30 years back Japan experienced their very own actual estate/credit bubble breast. China has tried practically every thing the Fed has attempted from reducing liquidity shots, interest rates and currency deflation to be able to restart their troubled economy - it's all failed. Consequently of those financial tests Japan has kept in a protracted economic downturn. Before it begins the procedure of trying to reduce interest rates in a very delinquent economy is doomed to failure. The are just a few items that works to restart the economy as of this stage of the 1) Somewhat reduce tax rates and merely the tax code, and; 2) significantly reduce restrictions on companies. Even these actions won't see an instantaneous return to financial power increase private savings before they could return to traditionally tougher consumptive designs and as customers should continue the process of their very own balance sheets. Consequently, greater private savings rates will result in profitable investment which will promote economic development. Unfortuitously, this is simply not being permitted to occur. Today we're not just seeing the Fed copy early in the day failed plan, we're also seeing President Obama introduction another $457 billion "stimulus" that'll increase taxes by significantly more than $400 billion and include at the very least another half-trillion to the nation's already huge $14.5 billion debt. No body, that's the smallest little bit of intelligence, believes that's the actual response to the issues that we experience. The truth is, the White House to failed "spend our method to prosperity" measures and as the Fed still clings to failed Keynesian guidelines - the typical American is gradually being sucked dry by increasing inflation and decreasing wages. These same procedures coupled with regulatory change functions which are yet to be created, risks of weak income, higher fees and political uncertainty have pressed entrepreneurs and companies in to defensive positions. Unfortuitously, these persons and organizations also eventually be the only people that really have the capability to create jobs - perhaps not the federal government. It's time for you to get a stake to the center of our issues - debt. The truth that people experience today isn't among a financial character - it's purely financial. A credit caused growth has resulted in a period of malinvestment. We should now start to understand that this is simply not an ordinary economic recession but instead a balance sheet recession. We should now do what's impossible with this management - get free from the way and allow the program clear the excesses. The procedure won't be easy but fundamentally birth will come, the skeletons will disappear in to the water and economic life can and will continue. http://www.zerohedge.com/news/guest-...ont-kill-beast