Taking Risk is Now Encouraged


By Rex Johnson

Screen Shot 2013-08-15 at 11.52.23 AMI have been telling credit unions that it’s time to start taking more risk for the last six years. It wasn’t a fashionable message in 2007-2008 and it still isn’t today. But that trend is beginning to turn around and guess who’s behind it? It’s gathering a lot of momentum thanks to President Obama, the U.S. Federal Reserve and the NCUA. Why? Because everyone is beginning to understand that the only way to jump-start this economy is by creating jobs, and that will not happen unless everyone starts spending money.

Money, Money Everywhere

The U.S. Central Bank started to make money available beginning in November 2008. Here’s what they did:

  1. They went through three rounds of bond buying
  2. They cut short term interest rates
  3. They brought interest rates down to practically zero
  4. They injected a trillion dollars into the financial system

The Fed received worldwide support, from Tokyo to Frankfurt to London, in their push to make more currency available and soon presses were working overtime: money was being printed everywhere.

Their economy-building plan was based on a simple theory: We stimulate the economy anytime we spend money and that means more jobs are created whenever Americans accelerate spending. In fact, consumer spending accounts for anywhere between 40-70 percent of GDP, depending on how it’s measured. That’s a lot of stimulus.

This content is for CU BUSINESS eMagazine , Special Deal: 2 websites , and NEW! The Leadership Team Builder Group Subscription members only.
Log In Register

Share post:


More like this

14,000 Members Returned to Credit Unions

SAN DIEGO, CA. (December, 2022) CU Revest announces the...

Credit Unions and Credit Cards Can Help You Beat Inflation

We all know the story. Inflation is at its...

A Tribute To A “Problem Solver”, Rex Johnson

Publisher’s Note:  We all lost a good friend with...

What Do Borrowers Really Want? Why Interest Rates Are No Longer Enough

Loans are a basic part of life – they...