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To: Condor who wrote (19442)	11/10/2004 3:35:39 PM
From: jrhana	Respond to of 313719

<Even with this increase, the fed funds rate remains below inflation, creating stimulus for the economy.> money.cnn.com

To: Condor who wrote (19442)	11/10/2004 3:40:05 PM
From: Bruce Robbins	Respond to of 313719

IMVHO, the FED would not be doing this if they were not in trouble. The FED raises the rates when it is too late- in reaction to something and not in prevention of something. It tells me that in spite of the propaganda to the contrary inflation is already rearing it's ugly head. They will not be able to raise the rates fast enough to counter what is coming. Check the chart- the ramp up to 2% came fast. Think back to the late 70s and early 80s- rising interest rates did not lead to weak gold. Just my 2 cents... B

To: Condor who wrote (19442)	11/10/2004 3:47:39 PM
From: Bruce Robbins	Read Replies (2) \| Respond to of 313719

From Jim Turk's interview: smartmoney.com Q: How is that? A: The Fed is raising interest rates slowly. If they wanted to defend the dollar and keep commodity prices from going through the roof they have to protect the dollar's purchasing power. They would do that by raising interest rates more rapidly. That's what former Fed Chairman Paul Volcker did in the late 1970s. The Fed recognizes they can't raise interest rates because of the mountain of debt that confronts us. The economy wouldn't be able to handle the additional constraints placed on it that would result from higher rates. The Fed is allowing the dollar to go lower and as a consequence we are seeing higher oil prices and other higher commodity prices. The Fed has made that determination and that probably doesn't bode well for the dollar because the only way you save the dollar is through higher rates. IMVHO, the fact that the FED is ramping up rates tells me they are more worried about where inflation is headed than default on debt... EDIT What happened to that infamous quip by Bernake about printing as many $ as they had to? I thought this was going to be the strategy instead of raising rates. B

To: Condor who wrote (19442)	11/10/2004 4:02:31 PM
From: Proud Deplorable	Respond to of 313719

the job growth stats are BS ...more hamburger slingers. Inflation is already out of control and they would need to really raise the rates to quell it so they lie about the components that make up the inflation figures. They cannot raise rates too much further as it will kill the housing market which in turn will dry up consumer spending. They can't raise rates enough to cause the dollar to rise as the same thing would happen and remember that the strong dollar policy is to let it fall. Then the real panic starts as the US dollar still keeps falling. The beneficiary is gold. The cataclysm is coming..."bring em on" as that clown in the white house would say.