The American financial helping package is GOOD
Better late than never
The American Government started out creating a help package in the cooling water og Fanny May and Freddy Mac. Now finally the American politiciens have sent 800 billion dollar out to the last link of the financial system – namely the consumers. This link being the home owners and consumers are important when wanting to turn the financial situation around.
Forcing the interest rates down
Whereas the first financial package was directed toward the ailing financial sector, the American Central Bank this time expects to spend 600 billion dollar buying up debts, wich either are issued or secured by public controled mortage credit companies.
How does this influence on the interest rates?
By buying up the debt taking over the mortages one will force the interest rates down. In this way it will become cheaper for the home owners to refinance the mortages. Another effect is that it will become easier for potential new home owners to get into the market.
Support to private and small companies
Besides the mentioned financial support a third package is one it way. This package will support loans from private and small companies. I belive that the American comsumers fast will fell the increased amounts of money , which hopefully can help to stablize the stock markets aswell.