Tuesday, March 11, 2008

Time for inflation mouse to speak again

It has been some time since I've talked about the Feds rate cut. Main reason is because I've been disillusioned by the "inflation mouse". All that tough talk about reigning inflation is nothing more than talk. It has been 6 months since the first of the rate cuts by the Feds. The market now speaks of its so-called "effectiveness".

Granted that this problem should not be solely thrown at the Feds. The US government must take a bigger role in this. All this cutting of rates is no use! Whether its a cut of 50 basis point, or 25 basis point, or 75 basis point, it makes no difference. The housing problem has blown up, and the US government should step in and do something about it. Admit that its a policy problem and resolve it. If there are really so many sub-prime borrowers, the US government should really start thinking about why did it happen. By law, arrange some debt repayment scheme for the borrowers. For once, the US government should start finding these people jobs and not making war everywhere.

If the Feds continue their rate cuts, USD will soon lose their status as the reserve currency. When that happens, the Feds will never be able to undo the damage done to the economy and there might even be a replay of the great depression.

Like I said last year, this year is going to be very interesting indeed.

No comments:

Visit Rhinestic's Knick Knacks @ Etsy for handmade goods and supplies!

Related Posts Plugin for WordPress, Blogger...