10/31 Can someone please explain to me why the Fed is about to cut rates
again when:
1) The dow is only slightly off it's all time high.
2) Oil is at or above $90.
3) The dollar is going off a cliff.
4) GDP grew 3.9% in the 3rd quarter.
5) P&G and Colgate are announcing big price increases.
\_ Credit is very tight right now. They can increase the money supply
by printing dollars, or decreasing rates. I personally hope they
keep it tight until all the bad loans fall out.
\_ I agree, flush out all the bad apples, start with a clean slate
\_ Unemployment is up, GDP growth over the last year has been 1.8%,
which is well below what the economy should be able to perform,
and "core" inflation is low. The weak dollar might even be thought
to be a positive, because it is contributing to economic growth
and helping to solve the trade deficit. Overall, I think the Fed
is worried about a recession (which they should be, imo).
\_ ... and, USG thinks there won't be significant capital flight even
with continued rate cuts and hits on the dollar--that U.S. markets
will be perceived as a deteriorating, but performing investment.
USG will slow rate cuts / tighten if this becomes less true. |
http://csua.com/feed/