Behind Cheaper Credit……………. Inflation Fears Loom

[Ex-SD]

Lee Hoskins, former president of the Federal Reserve Bank of Cleveland, co-wrote a Forbes magazine piece that compared the current economy with that of the 1970s. “The Fed has abandoned the one thing it can truly control — the long-run increase in price levels — in a self-defeating attempt to keep the economy growing,” he wrote. “Creating more dollar bills will not add to the nation’s wealth, or make workers more productive.”

This and other opinions in this story:

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/18/AR2008031803479.html?hpid=topnews

[cr]

People say the interest rate cuts take a few months to take effect on the economy.

I’d have to agree.

After the first major cut about 6 months ago, only last month did the Taiwan Dollar gain about 7% on the US Dollar.

The RMB has gained 10% in 12 months, but most of that in the last 6 months too.

Following the latest rate slashing extravaganza we probably won’t see inflation really pick up until the summer.

And since very few rates for consumer spending are lower I fail to see how the Fed has done anything but make everyone feel okay for a little while longer.

It’s like an airplane plummetting towards certain death where the pilot assures everyone “everything’s okay folks”. Everyone celebrates for 5 minutes until they realize the ground is that much closer.

[cr]

People say the interest rate cuts take a few months to take effect on the economy.

I’d have to agree.

After the first major cut about 6 months ago, only last month did the Taiwan Dollar gain about 7% on the US Dollar.

The RMB has gained 10% in 12 months, but most of that in the last 6 months too.

Following the latest rate slashing extravaganza we probably won’t see inflation really pick up until the summer.

And since very few rates for consumer spending are lower I fail to see how the Fed has done anything but make everyone feel okay for a little while longer.

It’s like an airplane plummetting towards certain death where the pilot assures everyone “everything’s okay folks”. Everyone celebrates for 5 minutes until they realize the ground is that much closer.

[cr]

People say the interest rate cuts take a few months to take effect on the economy.

I’d have to agree.

After the first major cut about 6 months ago, only last month did the Taiwan Dollar gain about 7% on the US Dollar.

The RMB has gained 10% in 12 months, but most of that in the last 6 months too.

Following the latest rate slashing extravaganza we probably won’t see inflation really pick up until the summer.

And since very few rates for consumer spending are lower I fail to see how the Fed has done anything but make everyone feel okay for a little while longer.

It’s like an airplane plummetting towards certain death where the pilot assures everyone “everything’s okay folks”. Everyone celebrates for 5 minutes until they realize the ground is that much closer.

[cr]

People say the interest rate cuts take a few months to take effect on the economy.

I’d have to agree.

After the first major cut about 6 months ago, only last month did the Taiwan Dollar gain about 7% on the US Dollar.

The RMB has gained 10% in 12 months, but most of that in the last 6 months too.

Following the latest rate slashing extravaganza we probably won’t see inflation really pick up until the summer.

And since very few rates for consumer spending are lower I fail to see how the Fed has done anything but make everyone feel okay for a little while longer.

It’s like an airplane plummetting towards certain death where the pilot assures everyone “everything’s okay folks”. Everyone celebrates for 5 minutes until they realize the ground is that much closer.

[cr]

People say the interest rate cuts take a few months to take effect on the economy.

I’d have to agree.

After the first major cut about 6 months ago, only last month did the Taiwan Dollar gain about 7% on the US Dollar.

The RMB has gained 10% in 12 months, but most of that in the last 6 months too.

Following the latest rate slashing extravaganza we probably won’t see inflation really pick up until the summer.

And since very few rates for consumer spending are lower I fail to see how the Fed has done anything but make everyone feel okay for a little while longer.

It’s like an airplane plummetting towards certain death where the pilot assures everyone “everything’s okay folks”. Everyone celebrates for 5 minutes until they realize the ground is that much closer.

[Author]

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