Hold Interest Rates Steady!
Posted
Mar 13 2008, 09:15 AM
by
Richard Schwartz
CHAIRMAN BERNANKE: “HOLD INTEREST RATES STEADY ON TUESDAY!” Hey, why not? What have we got to lose? Cutting interest rates sure isn’t working, right? Along with setting interest rate policy, the Fed has another role, that is being the “lender of last resort.” They’ve sure done that this past Tuesday, so let’s try that for awhile and stop this failing attempt of “throwing money at the problem.” Lower and lower interest rates are just KILLING us as the dollar is sinking, yesterday accelerating downward from its already steep decline. And in turn causing commodity prices, especially oil to go through the roof as hedge funds pile into oil. There’s no reason for crude to be near $110 a barrel now, fundamentals don’t justify these prices not with economic growth slowing all around the world. It’s only that oil is priced in dollars and the sinking dollar causes speculators to pile into oil. And imagine what these oil prices are doing to Japan which imports all its oil and to Europe too, not too mention us here in the US. This “papering over the problem” by cutting interest rates is now causing higher and higher inflation. Schwartz View: “Thus Mr. Chairman, let’s try something new. DON’T cut interest rates next Tuesday!”
Filed under: Principles of the Stock Market, Richard Schwartz, Gold, Inflation, US Dollar, US Economy, Keys to the Market, The Fed, Macroeconomics, US Treasuries, Bubbles, Commodity Bull Market, Portfolio Strategy, Federal Reserve, Oil, Interest Rates