The Fed is willing to hold out hope that inflation will ease, and while we wait you get screwed. So in the mean time just suck it up, be a man and pay for this wall street bailout.
How the financial channels can parade the talking clowns in front of the silly viewers and say the Fed has done a great job is just amazing. The stock market is lower, rates are higher, housing prices keep falling. And here is the real kicker. Prices we all have to pay every day for food and energy have gone way up. Can you really say the Fed has done a good job? My god do they think the public is that stupid? I challenge anyone to tell me what is better from the Fed actions over the last 12 months.
You have to give it to Bernake and co. They have done this before. They make dollar statements and it works. Their actions are another thing. But they did trap some commodity longs today. A strong dollar gives them options they need. It takes them out of a box they seemed to be trapped in. I need to watch this dollar. Instead of them saying they will protect, they are now saying the market will take care of it. It goes against my belief, but maybe... Gonna see what the dollar does after the noise settles. It has been very bullish until Fre Fnm.
It turns out that some of the most productive anglers are also master baitors. bwahahaha, I couldn't help myself on that one. Its Friday, I drank lunch and now I'm poo-faced.
Do you really want the answer to that question? Worse yet, do you want to know whether their assumption is right or wrong?
ET loves to monday morning quarterback the FED. These guys have degrees up the ass from the best schools in the world. OK maybe they lack some real world experence, they they are not blind. Aug 2007, everyone is flipping out they have not cut real rates, they tried to do everything they could have before they cut rates. Finally they cut rates, and god forbid, we have 4.5% inflation. lets just say oil goes back to $70 a barrel. Now do we have deflation? Inflation is NOT inbeded in the system yet. It is just a function of food and energy. We do not have the same union issues Europe has. Next president gets off ethonal and if the $ goes up 20% then we have "deflation" issues and a bunch of Hacks on ET are bitching out there ass again. Relax with 4.5% inflation it better then the banking system going under. I think the FOMC is a little smarter then us.
The fed doesn't want a strong dollar. Who do you think is behind the massive devaluation of the dollar? Read a bit about Bernanke's solution to deflation. He wanted a burst of inflation. His goal was to do a one-shot burst of inflation to avoid a deflationary spiral. You see, we are seeing a massive deleveraging of the system, which is hugely deflationary. But do you hear anything about deflation? No, so far, Bernanke's plan is working perfectly for him. Except that this is a theory being tested for the first time. I think the guy has it all wrong. Inflation is not what we need to get out of this disaster, we need all these shitty banksters to fail and let the system wash clean.