Everything the Fed is trying to end.

Over the past several months, the Federal Reserve has been hard at work trying to sort out the financial mess that the United States has been making for the past several years. They accomplish (or maybe I should just say have been trying to accomplish) this through the buying and selling of treasury bonds. The process is called an Open Market Operation and the Federal Reserve uses this to expand or contract the money supply. In our present state the Fed is trying to expand the money supply, rapidly. They have suceeded in increasing the money supply by almost 400 billion dollars which is a tremendous amount of money. However, if you haven't noticed the Fed's valiente efforts to curb the financial meltdown have been all but ineffective.

The problem is primarily a result of something the Fed cannot control: consumer spending habits. As the conditions of our economy have worsened a majority of consumers have begun to save more and more. Most of their saving is motived by fear and is a solely precautionary measure against the falling economics times. Sadly, in order for our economy to rebound and reach its full potential consumers must start spending again. Articles like this, just aren't what the American public needs to hear right now.

Instead of saving, spend, but don't spend extravagently. It's just not worth it to buy someone a $200 pair of jeans for Christmas. If that's the only way you can say I love you, it might be time for counselling. That, however, is a different topic, one which I am not at liberty to discuss at the present moment. The key point I'm trying to make is that people have to spend, they just have to, saving will not restore our economy. Be a smart spender.