Nice post LA Renter. I think there may be some merit to your theory about the delayed effect of the cut so as to get in front of the curve on Deflation. I’ve considered this myself, but like you said, it’s confusing and frigtening that we got to this point at all.

I think there are really two camps of thought on this:

One => Increase rates and tighten immediately and then let the cards fall where they may.

Two => Decrease rate and provide liquidity risking the USD until the deflate effects are more obvious.

This is Bernanke’s Box as best as I can describe it. Mish Shedlock predicted this about 18 mos ago. I should have been better prepared 🙁