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Strategies & Market Trends : Natural Resource Stocks

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From: lag3518/28/2007 8:23:04 PM
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Something to think about

Will the Fed respond to the latest market decline with a reduction in interest rates? Only time will tell, but with the S&P down just barely 10% from the highs and the US Dollar perched above all time record lows, one thing is certain. The Fed had better be very careful not to resort too quickly to the kind of moral hazard that a bail out would perpetuate. Over-reacting this early in a crisis could push the Fed into a crippling and irrelevant posture with lower interest rates ultimately set to backfire on Treasury Debt. In that outcome, the damage to the system would be even more extreme and would amplify the current crisis more then one thousand fold.
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