Fed's Rate-Rise Plans Amount to "Bribing Banks Not To Lend" | The Wall Street Examiner

``That is correct. The new Fed policy amounts to increasing [banks'] government subsidy. It is simple bribery. They will attempt to bribe the banks not to make loans. But they can't enforce that. The banks will still hold all the cash they did before. The increased subsidy will lower their cost basis. I fail to understand how bribing them by paying them more money and telling them not to lend would work... It is my belief that the Fed's new ... theory of raising interest rates will fail miserably in practice. If and when the Fed ever gets serious about raising rates, it will need to shed assets from its balance sheet, thereby shrinking the excess cash in the banks, to do so. However, the relevant question may be whether the time that the Fed gets serious has arrived, or will ever arrive.''