-------------------------------------------------------------------------------- Great commentary by you both. Perfect assessment of the situation imo. Thanks!!
Bernanke proved to be behind the curve once again. Only when the world wide markets melted and the US futures pointed to pre-market crash this idiot went out and cut rates. He could have done that 1 week ago and saved all this meltdowns around the world. He is reactionary ivory tower intellectual with an unshaven face.
The system was designed to produce chronic inflation. Raising rates does not do much, really more of a psychological effect. To push up rates to over 10% would take years under their current way of doing things. Now if they decide to truly shrink money supply, then you will have deflation, via 1930s style. But there won't be any recovery, just a full bankruptcy of the nation. As long as you focus on the Fed Funds Rate, you will continue being hoodwinked. The whole nation is controlled by credit and the banks which extend that credit. So call Bernanke a goof all you want, he may be a naive fool, but the Federal Reserve and those who truly control it have you by the balls.
Bernanke cut the rates and that is an empirical fact. There is not much you can do about it either. Sorry to disappoint you, but there is no recession on the horizon or in an election year.