Need I say more. Bernanke screwed it all! What's your best guess of inflation in the US? Mine is 25-30%... Why do they still bother about corerates of 0.2 or 0.3 while all wallets are empty due to inflation? The only way to support the other two exploded bubbles (housing and credit) is to let some money flow out of the stockmarkets into housing and credit. Otherwise where should the money come from to strengthen housing and credit?? I'm still waiting till the day gold spikes from 1000 to 1100, silver to 25$, yen under 100 to a dollar. And a huge drop in government bonds... The credit crises is caused by inflation, you get only 3% on your savings, while you loose 25% on inflation, so real losses yoy 20%. So no more money comes into the bank. Because the inflation is now even higher than 8 to 12% (nominal returns on stocks), soon there will also be an equity crises (you still loose 12% minus inflation of 25%). This whole cycle will stop only when Amerika starts saving and Bernanke stops cutting! Good luck! And remember: OPEC will stop cutting only when Bernanke stops the dollar falling to 1.70 against the Euro
In terms of rational behaviour, it's the stupiest thing to let people expect ratecuts (like Bernanke does). When everybody is expecting lower interest rates in the future, everybody is postponing consumption today. So instead of saying: Hello, why should you consume today? He must say: I'm going to increase tomorrow, so everybody starts consuming today!!! That's the way the ECB acts! Threat with higher rates (and inflation fighting) but DON'T increase rates!
Looks like in a couple of years we Dutch can exchange Paramaribo once again for New York with its huge dept. Everybody got already acquainted with that place after the Holloway-case.