He is overly focussed on this one reference point and the fact that they did not cut rates. There are other more recent examples that will tell him things he clearly does not know, e.g. Japan where they DID cut interest rates but did not allow clearing and bank failure to take place (sound familiar?). Result. A great Depression that lasted 10+ years. A condition of IMF (i.e US) aid in the South East Asian crisis of '97 was that failed banks and financials that the central bank was supporting in the same way the Fed is supporting banks now were CLOSED DOWN. Just by coincidence GS and LEH then came in the wake of the IMF and bought the assets for pennies on the dollar and made huge profits. Why is the medecine the US dished out elsewhere not applicable to US banks when they are insolvent? This academic buffoon/bank poodle, whichever he is has to go as does the Fed. Rogers is right, Bernanke is out of control. It is insane that the whole world is dramatically impacted and held to ransom by decisions made by a handful of banks/a committee of academic buffoons. You only have to look at the boom and bust history of the US post 1913 to see that the Fed does not achieve what it was supposedly set up to achieve.
Ive never seen a more concerted effort to delay reality. The country is WAY too overleveraged and finance based. Its scary that the fed and the government are still in agreement that this is a sustainable economic system. I thought a couple of months ago the realization that things really needed to change was becoming obvious to everyone, but apparently not. Apparently were going to have another major crisis until everyone realizes that major painful changes need to made.
Most people don't understand that companies like Harley Davidson are trading like financials because they ARE financials. Ford built its cars at a loss and made its margin on the financing. What happens to that model when yiu don't have cheap financing? BTW, Toyota makes its money on the cars and only pushes its own financing to keep capacity utilisation up above B/E in a recession.
I love how all these street guys on tv talk about the real economy like theyre not apart of it. Finance is the real economy. This whole system is so unstable its silly. Everything will be fine as long as nothing ever fails ever. How likely is that?
Again, you refuse to ANSWER the question that I posed to you days ago . . . Given that the savings rate of Americans is the lowest out of any industrialized country ( and was ZERO for the entire 2005 year ), where do you believe CAPITAL FORMATION comes from in the U.S. economy? This is a VERY important concept for the U.S. economy, but for some bizarre reason you are unable to answer this question, ( and in doing so ) no where in any of your posts do you speak about how the economy is able to expand and produce jobs and growth. Strange.
Let me answer you this way. What exactly would be wrong if this economy doesnt expand, grow or produce jobs for a year or two. Maybe its a harsh thing to say, but maybe we need some pain. They're called recessions, maybe you've heard of them?we've had plenty of them in the past before the idiots at the fed repealled the business cycle. Thats the problem with some of you, this belief in constant growth with no hiccups, no creative destruction, no ringing out of excessive risk and speculation from the good times. I dont care what you or the fed or anyone else thinks or believes but you can only push contant growth mantra to a point and the farther its pushed without being allowed to correct, the more painful the eventual recession will be. The fact that you fail to grasp that is whats truly strange.