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Gold/Mining/Energy : The Metals Thread
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From: Taikun3/22/2007 2:17:46 AM
   of 252
 
From another thread:

FOMC Announcement Translation

We are unanimously scared half to death by the implosion in housing, defaults and foreclosures. Our biggest fear is a recession. A jobs slowdown would worsen that situation dramatically.

We are also somewhat concerned by rising food prices but those prices are soaring primarily because of Bush administration policy handouts to farmers and the ethanol industry. Economic policy can not really cure problems caused by poor administrative decisions. It would be a mistake to try.

Because of blatantly bad policy decisions by us, notably Greenspan's praise of subprime lenders, promotion of ARMs at the exact worst time for the consumer, support of toxic loans, and most importantly our previous decision to slash interest rates to 1%, we created the current property bubble. We now admit we did that on purpose. We just never expected the bubble to get this out of hand. We created the housing bubble on purpose to bail out banks that were at risk due to poor loans made to the dotcom industry. Now to bail out the housing industry we feel compelled move to a more neutral stance.

With consumer debt levels where they are, we are going to do everything in our power to keep asset prices high. If we could, we would even reinflate the housing bubble. But that gig is up unfortunately and with it any real hope for jobs expansion.

Now is not the time for a recession. We are in this fix because there is never a time for a recession. We hope to forestall recessions forever because if we can't all hell will break loose on the downside.
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