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The biggest concern is that even with banks being able to borrow money to lend at virtually no interest, they will not lend it to generate consumer spending. The reasons for this limiting of credit are two-fold. First, lending institutions are loathe to take on the risk of default in situations where the borrower may not be able to repay as agreed. Second, banks with shaky balance sheets due to mark-to-market requirements (which value long term assets in terms of their fire-sale price this month) would rather hold onto the extra cash as reserves than lend it. So, what will ultimately cause the economy to recover? What most Americans hold as their largest asset - real estate - will have to begin increasing in value for the net worth of America to rise to a level that will sustain an economic recovery.
