Comments on: The Fed cut rates 2.25% since September http://polizeros.com/2008/02/27/the-fed-cut-rates-225-since-september/ Musings on politics: anti-war, global warming, peak oil and otherwise Thu, 08 Jan 2009 01:22:30 +0000 http://wordpress.org/?v=2.7 hourly 1 By: DJ http://polizeros.com/2008/02/27/the-fed-cut-rates-225-since-september/comment-page-1/#comment-149408 DJ Thu, 28 Feb 2008 14:15:30 +0000 http://polizeros.com/2008/02/27/the-fed-cut-rates-225-since-september/#comment-149408 The Department of Labor reported Tuesday that inflation ran at 7.4% from January 2007 to January 2008. A lender must charge at least that much on a mortgage just to keep up! To make a profit (and allow for future inflation) the rate must be higher, otherwise there's no point in lending. The clueless Bernanke Fed dropped rates to try to stimulate the economy, which didn't work. In the 4th quarter, it "skidded to a near halt" despite the plunging dollar (AP). At the same time, it pumped skads of dollars into the credit market-- an inflationary move if ever there was one. Bernanke blames inflation on the commodities market. But inflation is by definition caused by printing more money-- and that's exactly what the Fed has been doing. Naturally, in the real world, interest rates are rising despite the Fed's cuts. The Department of Labor reported Tuesday that inflation ran at 7.4% from January 2007 to January 2008. A lender must charge at least that much on a mortgage just to keep up! To make a profit (and allow for future inflation) the rate must be higher, otherwise there’s no point in lending.

The clueless Bernanke Fed dropped rates to try to stimulate the economy, which didn’t work. In the 4th quarter, it “skidded to a near halt” despite the plunging dollar (AP). At the same time, it pumped skads of dollars into the credit market– an inflationary move if ever there was one.

Bernanke blames inflation on the commodities market. But inflation is by definition caused by printing more money– and that’s exactly what the Fed has been doing. Naturally, in the real world, interest rates are rising despite the Fed’s cuts.

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