Fed prefers gradual crawl into the Liquidity Trap with 25bpt
I havent yet read their comments
probably full of Fedspeak crappola
they raced with 12 rate cuts ending last November
what does the market, what do economists expect, with this latest cut that didnt occur in the previous 12 ???
in the next few months, we will see gradual erosion of trust in both Greenspasm and the Federal Reserve itself
I said all summer last year that the Fed would be rendered powerless, as the asset bubble deflates, as the overcapacity lingers, as the bankruptcies continue, and as more debt is incurred
we are seeing exactly that
now our two greatest risks come internally (lost jobs) and externally (falling dollar, import price risk)
we are much closer to the Puplava Perfect Storm than a year ago
in fact, I believe we are now caught within its snare
only a matter of time
its telltale characteristics:
- economic recession
- stock bear market
- falling dollar and price inflation
damn, this is to get ugly
we Americans like to think the Japanese handled their LiqTrap poorly
we are doing the same thing
the latest parallel item is that US Mortgage system is now gearing toward inflated real estate
not just the banks, but the GSE's Fanny & Freddy
as real estate unwinds in price, the damage will be localized to the GSE's
some morons call it a RE bull market
it is merely a new asset bubble which will unwind
when it does, GSE's will require a $1 trillion bailout, and many banks will be severely harmed
/ jim |
