Ramsey, I'm pleased to translate for you.
Bernanke said that a lagged putt is better than going AWOL and off the green into the pond. Meaning, when in doubt, which the Fed is about the overall situation, it's safer to take a gradualist approach rather than an engineer's bang-bang approach [whatever that means - I hadn't heard of the term in my engineering days].
That means they are going to gradually increase interest rates, bit by bit, and admittedly not as far or as fast as they think is the right amount. He would like to raise them right now to 8%, in a Big-Bang approach. But that might dislocate the markets. Just as, on the way down, they would like to have gone straight to 2% in one go, but didn't want to cause an financial collapse, cascading through margins and loans in one gigantic implosion.
So, prepare for rising interest rates.
Softly, softly, catchy monkey. That's their approach. Not a lunge and a grab. They think interest rates need a hefty increase.
Mqurice
PS: Gold doesn't return interest, so is likely to lose 'visa vie' the US$; unless the doomsters are right and the US$ is doomed, with people going back to carrying a little bag of gold and silver coins. |
