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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Maurice Winn who wrote (69050)5/2/2008 7:19:45 AM
From: carranza2  Read Replies (5) of 74559
 
BBR will serve as one of my watch towers for macro proceedings in the gloom and doom stakes.

It has always been one of mine.

Elmat has unfortunately allowed a good place to get out of control. The signal to noise ratio is presently very low.

Part of the boom/bust thread cycle.

Given the fact that the US is undergoing underreported inflation [it is likely in the 7% to 9% vicinity, perhaps more] while the Fed's interest rate is 2% at a time when the Fed is inflating the money supply, it is only a matter of time before the Fed will be forced by an acknowledgment of inflationary circumstances to raise rates. A mix of inflation, high liquidity and low interest rates is crazy and unsustainable.

Bernanke is not acting in the public interest by keeping rates as low as he has. He will be forced by circumstances to raise them. This is inevitable, predicted, foretold, and predestined.

We all know what will happen when the Fed raises, as it must: Stock markets will tank. In the meantime, all the liquidity being created must make a bubble. What better place than the stock market? Perhaps Bernanke feels that he can destroy a significant portion of the unnecessary liquidity he has created when he raises rates

The question is: When will the Fed raise rates?
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