Posted on 08/10/2011 11:36:58 AM PDT by Signalman
NEW YORK (CNNMoney) -- Is the Federal Reserve waving the white surrender flag? It sure looks that way.
The Fed made the unusual (and unprecedented) move on Tuesday to tell the market in plain English that it intends to keep rates near zero for the next two years!
That is disappointing on many levels. First and foremost, it is a crystal clear sign from Ben Bernanke and other Fed members that they think the economic recovery (if one could still call it that) will remain tepid for a long time.
That is probably one of the reasons that the post-Fed euphoria on Tuesday afternoon on Wall Street quickly gave way to despair again on Wednesday.
This is not good. The Great Recession may have technically ended in June 2009. But for many Americans, this current malaise is just an extension of the problems that first began to surface in 2007. Lost Decade anyone
(Excerpt) Read more at money.cnn.com ...
Translation: we keep shooting the horse and it still won’t get up.
It is looking like the late 60s to me. Anyone else? I was young back then but remember things were just pretty much static except for the muscle cars and then we had the inflation and further malaise of the Carter years and more inflation. It seems like little was built new and when it was it was special, newsworthy.
I found a chart today showing the number of years a person retiring in a given year could expect to withdraw 5% of their savings. The late 60s and early 70s were dismal, worse than the depression years.
I swallow hard to say I don’t think this is all oblabla’s fault but he has sure finished driving the car into the ditch and he has made it the deepest ditch he could find. It will take years and years to get out of this hole. What is different this time is that the chinese and the russians are relatively ahead and the rest of the world, especially us, are behind.
I feel so sorry for Mr Bernanke. Not.
This is the very person who testified twice before two congressional panels over the past month who crippled CCB, declaring that spending cuts in the near-term (FY 12) would harm the recovery. Idiot.
Bernanke is no monetarist and Milton Friedman would be spinning in his grave.
If Bernanke had any honor, he would resign.
If he had any honor, he'd commit Seppuku.
Gee, what insight from CNN after that "mother of all saviors" deal to save the country from bankruptcy was signed off on.
If you want to upset a nearby, passing “intellectual,” just remind her that Quantative Easing (QE) has never worked in all of History...and that’s the only plan that 0bama, Democrats, U.S. Treasury, and the Fed have.
A plan that has always failed in the past: QE. That’s their plan for our economy.
In all of Human History, QE has never once worked.
I find it hard to believe that they actually want to keep rates this low. Money is so cheap now that those that dont take advantage of it are missing out and they’re killing the dollar. I think that they should move the rate up to 2% to show the world that we are at least trying to get our fiscal house in order. And at 2% money will still be cheap.
We are in between QE2 and QE3 presently, so what does that say about the state of mind of the political elite's who have signed off on QE1 and QE2 with thought of QE3?
In my view, this HAS to end in an inflationary spiral.
I plan on paying for my house with Baraqqi/Bernanke minibucks.
Those considering Greenspan’s legacy might consider his probable “brilliance” in seeing this financial mess coming ... and getting out.
Your comment gave me the best laugh I’ve had in the middle of this whole sorry mess.
Thanks!
It was the Fed who drove the last stake into the heart of America when they started raising interest rates.
I know people overbought and people who had no business getting loans got them but the Fed also had to know that raising the interest rate was going to kill the economy.
They could have even raised them a bit and stepped back to see what happened but they just kept raising them without waiting to see what the result would be until it was too late.
WHAT??? Thrown in the towel? Hardly. By artificially manipulating the interest rates he has in effect given Wall Street a faux QE3. That is why the stock market made it's major rally yesterday. This is a backdoor stimulus operation. Hopefully investors won't fall for this crap this time around. Watching the stock market numbers today shows me that after sleeping on the feel good high of the fake QE3 perhaps investors are realizing that another stimulus just isn't going to work. Another good sign is of course gold steamrollering over anything and everything in it's path.
All that being said without a QE3 and investors inflating the market and our groceries, fuel and all other everyday living items, things are going to get really tight and very ugly on both a personal and a societal level. But, and this is extremely important to understand, we are going to have to go through this pain one way or another. We can either keep up the false hope and quick highs the Fed keeps throwing out there via stimulus scams, notice these bumps will be keep getting shorter and shorter until the system implodes, or we can put a halt to this craziness tighten our belts live a decade or so of extreme but controlled austerity and come out on the other side a leaner more fit and economically sound nation. I choose the latter not just because it is the right thing to do but because the future of our nation depends on it.
Me too, if they print enough money maybe they can make it happen but I think that was their plan all along but they haven’t been able to make it happen.
According to one report from FTN Financial, “Three voting members dissented in favor of maintaining the previous ‘extended period’ language. Among those voting against the action were: Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser.”
Some dissent is not unusual. But they are more likely to abstain than vote No. And there aren’t often so many of them.
The alternative would be to allow the dollar to continue being propped up by international bankers and shut down remaining exports from the USA. That would be fine with me, though—shutting down most of the revenues to rottenness, too. Either way, inflate or deflate, we’re heading for a change away from bipartisan political correctness business, government, academic leadership and away from their political correctness in the near future.
In earlier deflationary cycles they've usually let the farmers take it in the rear, with manufacturers simply shutting down and homeowners moving to the streets.
A negative rate for T-bills would tend to share the apparent losses.
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