Posted on 03/17/2008 4:13:01 PM PDT by shrinkermd
...Yet the conventional wisdom -- on Wall Street and in Washington -- the Fed is "behind the curve" and needs to cut interest rates even faster and further than it has. Never mind that this is precisely the path the Fed has followed since August, yet the crisis has grown worse and now bids to tank the larger economy. Does it make sense to do more of what isn't working?
The Fed's main achievement so far has been to stir a global lack of confidence in the greenback. By every available indicator, investors are fleeing the dollar for other currencies and such traditional safe havens as gold and commodities. Oil has surged to $110 a barrel, up from under $70 as recently as September. Gold is above $1,000 an ounce, up from $700 in September, and food prices are soaring across the board. The euro has hit record heights against the buck, and for the first time the dollar has fallen below the level of the Swiss franc.
Speculators are adding to this commodity boom, betting that the Fed has thrown price stability to the wind in order to ease U.S. housing and credit woes. The problem is that dollar weakness is making both of these problems worse. The flight from the dollar has made U.S.-based investments less attractive, at a time when the U.S. financial system urgently needs to raise capital. And the commodity boom is translating into higher food and energy prices that are robbing American consumers of discretionary income. In the name of avoiding a recession, reckless monetary policy has made one more likely.
(Excerpt) Read more at online.wsj.com ...
They want the dollar to be at parity with the Yen
No, they want it to be at parity with the Lira.
I’m glad to see the WSJ editorial board talking some sense (as usual). There are quite a few Freepers who appear to be diehard defenders of Bernake’s folly. If I were paranoid, I’d wonder if these were just stooges whose mission is to blindly defend policy on influential sites like this one (Conservative or Liberal). Personally, my acid test is to use CNBC’s Cramer as a perfect reverse barometer.
Hair of the dog bump.
The Fed has been much to active, they need to let the markets self correct more.
The trial balloon of a sub-prime loan bail out really irks me because I never did it, now I might have to pay for those that did ;(
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I have never really understood the inner workings of economics, but aren’t these 1/4 pt here and 1/2 point there reductions the primary reason the dollar keeps getting weaker along with the second thing they keep doing, by which I am referring to this almost continual “cash infusion” into our financial system??
Then to put the final nails in the proverbial coffin, they come up with this insane stimulus package on top of this damn Mortgage bailout... almost makes me wish I was stupid and would have taken the adjustable mortgage at 4.5% when it was offered to me instead of making them give me a fixed loan at 8.95%... because I sure feel stupid now...
I did not think it took a genius to understand that a healthy economy, like the stock market can not continually go up, it has to have it’s natural ups and downs. The stimulus package and mortgage bailout is only going to assure the coming recession and prolong the real estate crash.
| Date of Change | Prime Rate |
|---|---|
| 03-Feb-00 | 8.75% |
| 22-Mar-00 | 9.00% |
| 17-May-00 | 9.50% |
| 04-Jan-01 | 9.00% |
| 01-Feb-01 | 8.50% |
| 21-Mar-01 | 8.00% |
| 19-Apr-01 | 7.50% |
| 16-May-01 | 7.00% |
| 28-Jun-01 | 6.75% |
| 22-Aug-01 | 6.50% |
| 18-Sep-01 | 6.00% |
| 03-Oct-01 | 5.50% |
| 07-Nov-01 | 5.00% |
| 12-Dec-01 | 4.75% |
| 07-Nov-02 | 4.25% |
| 27-Jun-03 | 4.00% |
| 01-Jul-04 | 4.25% |
| 11-Aug-04 | 4.50% |
| 22-Sep-04 | 4.75% |
| 10-Nov-04 | 5.00% |
| 14-Dec-04 | 5.25% |
| 02-Feb-05 | 5.50% |
| 22-Mar-05 | 5.75% |
| 03-May-05 | 6.00% |
| 30-Jun-05 | 6.25% |
| 09-Aug-05 | 6.50% |
| 20-Sep-05 | 6.75% |
| 01-Nov-05 | 7.00% |
| 13-Dec-05 | 7.25% |
| 31-Jan-06 | 7.50% |
| 28-Mar-06 | 7.75% |
| 10-May-06 | 8.00% |
| 29-Jun-06 | 8.25% |
| 18-Sep-07 | 7.75% |
| 31-Oct-07 | 7.50% |
| 11-Dec-07 | 7.25% |
| 22-Jan-08 | 6.50% |
| 30-Jan-08 | 6.00% |
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