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Strategies & Market Trends : Ride the Tiger with CD
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To: Bruce Robbins who wrote (19447)11/10/2004 8:27:34 PM
From: Lhn5   of 313274
 
<<<IMVHO, the fact that the FED is ramping up rates tells me they are more worried about where inflation is headed than default on debt...

EDIT What happened to that infamous quip by Bernake about printing as many $ as they had to? I thought this was going to be the strategy instead of raising rates.>>>>

Raising rates VERY slowly from very very very very very low rates to very very very very low rates is not to defend the dollar except perhaps to brace it's slide. I think it is absolutely true that the current govt and private debts could not handle much higher interest rates without slowing the economy drastically.

Bernanke's quote could come into play IF the economy slows and lowering rates from where they are at that time does not provide adequate stimulus to prevent recession, depression, deflation.
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