Will the Fed Help Rescue Main Street?
While that notion sounds improbable to most economic observers, recent actions by the Federal Reserve have opened the door for critical direct lending to states and large municipalities. This is a big deal because not having to rely on the Wall Street bond market could both increase the amount of funding available and decrease the cost of that borrowing. It is an historic breakthrough that could make a critical difference as costs rise for local governments while their revenues drop precipitously due to the current economic collapse. Further, if this lending relationship continues, new prospects open for creating a distributed network of public banks that hold a permanent relationship with the Fed.
Cheers!
