So what would you do if you were the Fed Chair? 

Don't say "I don't know" -- if you can hurl stones, you can pick up a hammer, too. 

@bluesky93 - 

Go Dan go, go Dan go:)

That's just not correct. The money the Fed "gives" to banks are short-term collateralized loans, usually overnight loans (from the Fed's perspective, a reverse repo agreement). One of the main functions of the Fed is to enter into open market transactions to control the money supply. They can just as easily remove it by lending securities and taking back the cash (repo agreement). They also don't enter these loans for long-term. Banks need billions on an overnight basis during non-crisis times. Since banks don't want to lend to eachother, the Fed has to until the markets calm. Then, the cash is removed from the system and the banks start dealing again. This is bank funding 101.

@Jay060 - 

You're making too much sense and your injection of facts into these erroneous statements is unwarranted and unwanted. Why don't you just shut the hell up! :)

@TimRayPhoto - Thanks, Tim. 

Please realize that I'm really not trying to be pugilistic (though I don't know what emoticon to use to show that...he-he).  I respect other people's opinions and it's not my M.O. to come on here and call people idiots.  However, I'd rather see a united group of people "doing something" about problems (opportunities) than a divided approach where we're merely "saying something" (and nothing gets done). 

I recognize the importance of occasional "immodest and indecent invective" (nod to our founding fathers), but there comes a point where instead of just ranting...we need to start doing.

Gary says the ultimate fix is for real estate prices to go up...yet he also says he wouldn't invest anything in the U.S. right now.  How is this "don't put ME in, coach, I'm not ready to play" approach going to solve the problem(s)?  Doesn't this then BECOME the problem? 

Food for thought...

thank the good lord for funny money - the market is up 353 points today! we've weathered the storm! the crisis is over!

410.93

@Jay060-

Funny money IS funny money; no matter how you look at it. It might be bank funding 101; but it's also Infaltion 101.

Oh BTW: no, you can't just "pull the money back out".

@Joe_Farrugia - 

Of course it gets pulled out. When the loans mature, the cash goes back to the Fed. If they want to accelerate it, they start lending securities. Firms need those securities to cover their shorts.

Money 101:

http://video.google.com/videoplay?docid=-9050474362583451279&hl=en

  GQ

@Jay060 - 

Pulled back out, leaving the economy as in:"as if the funny money were never there"......yeah right.

"Entropy", anyone.....?