Is Ben Bernanke Engaging in Risky Behavior?

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Struggling companies are being helped out by the policies of the Federal Reserve. The Fed has been pursuing cheap-money policies, which allow borderline companies to get low cost financing. Investors who are looking for high yield and risky bonds are.

This has been a big help to poorly rated firms, but it also a threat when these companies that might have failed otherwise can cause substantial damage when the interest rates change.

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The Director of the Boston University Center for Finance, Law and Policy notes that this is what happens with a dysfunctional system and that as a result of the stalemate in Washington, the Fed ends up overcompensating.

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