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Strategies & Market Trends : The coming US dollar crisis
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To: el_gaviero who wrote (983)9/16/2007 2:47:08 PM
From: koan   of 71477
 
I agree with your assessemnt.

Put simply, as I am a simple guy-lol: during the last WORLD market meltdown the feds balked and the markets kept falling. The feds then lowered the discount rate and extended it from one day to 30 days and the markets turned right around.

The world's markets have spoken to the fed. Either give us what we want (liquidity), lower discount rates and lower fed funds rates or we will will panic again and sell off big time.

The big problem is that as Keynes formulated, we are supposed to save during times of economic expansion in the business cycle, so we can spend during times of recessions.

GW spent it all during the expansion and now it is recession time in the economic cycle and GW has shot all the bullets by piling up huge debts so large we cannot afford a recession or high interest rates.

So controlled inflation and a falling dollar is what we are left with.

This is not a problem with a good solution. It is a delima with only a bad decision and a worse decision.
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