The fear is that this might lead to higher inflation, and that the government's demand for funds will push up interest rates, crowd out private investment, weaken the financial system and leave the economy vulnerable if hit by a big macroeconomic shock.
ECONOMIST: Too little investment; too big a deficit; too few jobs
Japanese companies concentrated on investment not profits because the financial system and the tax regime encouraged them to do just that.
Analysts worry that some of the money going into these products has been used to make high-interest loans to risky private businesses shunned by the banks themselves, a phenomenon critics say could exaggerate loan and investment losses in China's financial system if an economic slowdown led to widespread defaults.
Public education is a major investment of financial and human resources and no country can afford to have a system which is not accountable.
One under-reported but highly significant aspect of the whole extraordinary incident is that Mr Dimon announced that he was abandoning a new financial system for monitoring the risks run by the Chief Investment Office and reverting to the old one - because the new model was chronically understating the potential losses the bank could have generated on any given day.
If anything, after the dot com, technology, and housing bubbles and financial system meltdown, the nation seems to be craving exactly the type of investment that Social Security represents.
The intervention of the British and Swedish authorities underscores the effect that a full-blown collapse of Iceland's financial system would have on the rest of Europe, given the heavy investment by Icelandic banks and companies across the continent.
Alltold, we have to fear that the damage to our markets and financial system will be so great that another generation of investors will be alienated from using investment as part of t heir survival, juyst as happened between 1929 and 1953, when the stock averages finally made up all their lost ground.
It is timely and important for two reasons: first, the interest and investment in Shariah-compliant finance in the West continues to grow, and second, the fragile state of our financial system of late is due to the catastrophic impact of toxic financial products designed as highly sophisticated black box solutions to undisclosed market risk.
CENTERFORSECURITYPOLICY: Shariah-Compliant Finance: Benign or belligerent?
By ditching its longstanding rule about lending only to commercial banks and extending this facility to investment banks, the Fed is in effect admitting that it faces a different sort of financial system one in which dealers pose as much of a threat to stability as lenders.
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