World Goverments Act To Try To Stem Financial Crisis

Governments around the world intervened early this week in their economies to try to hold back the financial slide. Here’s the latest of who’s doing what:

South Korea: cut key interest rates and bought the bonds of local banks.
Australia: bought dollars to buttress the exchange rate.
Israel: snipped rates.
Canada: vowed to inject $6 billion into its market.
Japan: increased access by banks to public funds and tightened short-sale regulations
Europe: is thinking about lowering interest rates
US, England: likely to lower interest rates further.
Iceland: Raised interest rates from 12% to 18%

A Scramble to Shore Up Economies Worldwide [NYT] (Photo: Getty)

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  1. ShariC says:

    Japan is going to offer more access to public funds? More? The people already offer their money to the government at virtually zero interest. I guess this means that they can just go nuts raiding postal savings accounts now.

    The only reason Japan isn’t in the same state (or worse) than the U.S. is that they have a country of savers who they can plunder funds from at any time. They don’t have to hock the country to China because they can borrow from their own people.

    • Erwos says:

      @ShariC: Huh? Japan is basically in the same state as us. Worse, even – they have an export economy, and their currency is appreciating VERY rapidly.

      • jamar0303 says:

        @Erwos: What are they exporting? Quite a bit of their manufacturing has already passed to China.

        • Erwos says:

          @jamar0303: Electronics. There’s still a substantial industry there, even if a lot of it has moved to China. Also, automobiles to the USA, that sort of thing.

          • Phas3Sh1ft says:

            @Erwos: Most Japanese people spend their money…The interest rates for any bank account is almost zero. I could put the money I make into a shoebox and it would accrue at the same interest as my bank in a year.

            But Japan’s economy isn’t as heavily reliant on imports/exports as it may seem. There are many reasons for this (I recommend reading Shutting Out the Sun by Michael Zielenziger for more details), but much of the Japanese industry/food/etc is for Japanese consumption or Japanese first, others second. The Japanese economy is pretty self-sufficient for a small, island nation, and that’s one of the reasons why (right now) it’s 95 yen for $1.

  2. proskills says:

    How will the continuation of rate cuts effect currency inflation? I can see that the USD is way up against the Euro, will that continue?

    • Erwos says:

      @proskills: It won’t matter very much at all, because everyone is cutting rates. It’s all relative, and relatively-speaking, the US is in better shape than most of the world.

    • lincolnparadox says:

      @proskills: It will slow down soon. The Treasury released $600 billion new greenbacks to stave off the mortgage crisis on 9/29/08. You add the $700 billion bailout and any gains that the USD has made with the adjustments in the trade imbalance will get wiped away quickly.

      I don’t know if it will go down, but it will level off, at least.

  3. Fist-o™ says:

    How can we somehow find a way to profit from all this?

  4. BusinessHut says:

    You forgot Iceland… Raised interest rates from 12% to 18%. Not good. bbc.co.uk has more about this if you’re interested.

  5. banmojo says:

    The Republic of Taco Bell is doing their part to help stimulate the economy by offering everyone who comes by a free beef taco today between the hours of 2pm and 6pm.

    Now that’s a plan I can really sink my teeth into!!

  6. jdmba says:

    I have lost a bunch in the market, but I am not selling. Part of me things “morons who sell in a bloodbath deserve to lock in their losses” and part of me thinks “for all that is holy, if everyone stopped selling, this would stop”. I’m torn :(

  7. Michael Belisle says:

    I posted this yesterday, but it was only tangentially related to that post. It’s much better suited as a commentary on this story.

  8. econobiker says:

    So I guess the tin-foil hat group cannot claim the “illuminati” are working this one well…