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Apr-19-2008Fed Officials May Be Nearing Rate Pause as Inflation Quickens(topic overview)
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Yellen, a former Fed governor and chairman of the White House Council of Economic Advisers, told reporters April 16 that the Fed "will have to be careful not to leave monetary accommodation in place longer than it is needed.'' Three other Fed bank presidents known for their more- forceful anti-inflation stances reiterated their concerns on prices. Philadelphia Fed President Charles Plosser said the federal funds rate is already low enough to support growth, while Dallas Fed President Richard Fisher said that he's hesitant to lower rates further and warned against "inflating'' the economy out of the credit crisis. Both men voted against last month's 0.75 percentage point rate cut. Richmond Fed President Jeffrey Lacker, who dissented four times in 2006 in favor of higher rates, said April 17 that he's "uncomfortable'' waiting for a contraction in the U.S. economy to bring down inflation. [1] Fed Vice Chairman Donald Kohn skipped the subject altogether in remarks at the Richmond Fed conference, focusing almost exclusively on banking and credit related subjects. Federal Reserve Governor Frederic Mishkin told a congressional panel "there is room" to lower monetary policy further, although his statement was essentially a recognition of fact. The current funds rate target stands at 2.25%, so there is clearly room to move lower, even if such an action is never taken. Federal Reserve Bank of San Francisco Janet Yellen came the closest to making the case for cutting rates further, although she also refrained from offering up anything concrete. She argued Wednesday "we'll see little or no growth and it could be negative" over the first half of the year, amid downside economic risks. That's something Lacker also expects, but Yellen does not fully share his inflation worries, as she expects price pressures to slowly fall.[2] "Inflation is a problem now. It is too high and personally I would be uncomfortable in waiting for economic slack to bring it down," Richmond Federal Reserve President Jeffrey Lacker told reporters on the sidelines of a conference here. "I am particularly concerned about movements in measures of expected inflation," he said. Lacker is not a voting member of the Fed's interest-rate setting committee this year. He is seen as one of the most hawkish Fed policy-makers and voted repeatedly for higher interest rates in 2006, when the Fed stopped raising its benchmark overnight funds rate.[3] Another official has also suggested he'd be uncomfortable with a move to lower interest rates further. Federal Reserve Bank of Richmond President Jeffery Lacker told reporters at a conference on credit held by his bank in Charlotte, N.C., Thursday that "inflation is a problem now. It's too high." The official, who isn't a voter this year, leaned against the dominant view among policy makers, which is that moderating, if not contracting, economic activity, will lower price pressures.[2]
Janet Yellen, president of the Federal Reserve Bank of San Fransciso, in a speech Wednesday, said the economy "has all but stalled and could even contract over the first half of the year." The report underscored the challenges facing Bernanke and his colleagues as they fight to keep the economy from sinking into a deep recession, while at the same time avoiding a flare-up of inflation. The report will figure prominently when the Fed meets April 29-30 to decide its next move on interest rates.[4] Inflation pressures notwithstanding, the Federal Reserve has been aggressively cutting interest rates in the past seven months, dropping the federal funds rate by three percentage points, to 2.25 percent. Leaders of the Fed do not want to cut that rate much further, as they want to save room for further cuts if the economy gets worse. The central bank is likely to cut the rate another quarter of a percentage point during its April 29 to 30 meeting, as suggested by trading in futures markets, with a smaller chance that it will cut by half of a percentage point.[5]
When the Federal Reserve lowers interest rates, it usually also has to instruct the treasure to print more money, -which it loans to the borrowers (simplied view of Fed :) ) This 'dilution' of the dollar is nothing but a tax on the poor. Dollar dilution results in inflation, which taxes both savings and spendings! In europe they have higher tax rates, and the taxes are spent a bit more wisely.[2]
Wall Street is expecting the Federal Reserve to cut interest rates at its upcoming meeting, but two officials seem uncomfortable with that view, thanks to worries about inflation.[2]
April 19 (Bloomberg) -- Federal Reserve policy makers, sensing both renewed inflation dangers and a possible economic boost from government rebate checks, may be nearing a pause in interest-rate cuts after the fastest reductions in two decades. In remarks this week, Fed Governor Kevin Warsh, San Francisco Fed President Janet Yellen and three other district- bank presidents voiced concerns about rising prices.[1] From the Fed's Same Mold…. On a semi-related note, Dallas Federal Reserve Bank President Richard Fisher was doing a Texas two-step of his own on Thursday. He was slightly more optimistic than Lacker was about the inflation situation. He also said the Fed must "trust and verify" the inflation trend. First of all, the only person in the world who can pull off the 'trust but verify' routine is its originator - the late Ronald Reagan.[6]
Federal Reserve Bank of Dallas President Richard Fisher has for several months now been among the central bank's outspoken critics of the way the Fed conducts monetary policy. He stuck to his guns Thursday, saying he had a "strong reluctance" to cutting rates again.[2]
Hawkish rhetoric from Federal Reserve officials and a rebound in the stock market has driven down market expectations for additional Fed rate cuts.[7] The creation of the Federal Reserve was an attempt to gain control of the markets to help keep the wealth in the hands of the elect few. They later crashed the stock market to bring about one of the biggest thefts in history. Religion was about all that people had at this time to fall back on. It helped keep people strong through this nations' worst Economic disaster. There were other time periods the nation had to rely on its faith, like WWI and WWII. Despite all these obstacles the people always rebounded. Despite the Economic sabotage and corruption in the Government they always had faith to rebuild, compete, and prosper. As long as the people had there faith there was no stopping them from excelling. As long as they had Rights there was no way to force them to be content with just what they had. As long as they elected the Government, there power was the bigger force of the two sides.[2]
Banks are taking on money on the cheap from the Fed and not passing it along to the 70% of the economy that matter at reasonable rates. Why isn't the WSJ all over the new credit card bill of rights for consumers as banks raise rates on their best customers in order to pad the books? The American people are not as stupid as they may look in the eyes of our so-called elected leaders. 'Critics have charged that many credit card issuers engaged in "unfair" practices such as raising interest rates on debt even when consumers pay on time or imposing excessive fees'. Another poor practice "universal default" which allows an issuer to raise interest rates if a consumer is late paying any other bills.[2] The Dow Jones industrials jumped 256.80 points. The Fed report underscored the challenges facing Bernanke and his colleagues as they fight to keep the economy from sinking into a deep recession, while at the same time avoiding a flare-up of inflation. The report will figure prominently when the Fed meets April 29-30 to decide its next move on interest rates.[8] Harvard University economist Martin Feldstein, who for almost 30 years has headed the group that decides the dates of recessions, called for an end to Fed rate cuts. Investors are increasingly taking such talk, along with economic data and company earnings, as signs that the Fed will leave interest rates unchanged for the rest of the year after a quarter-point move on April 30. The central bank has already lowered rates three times this year, to 2.25 percent.[1] U.S. short-term interest rate futures, which measure sentiment toward Fed policy, eliminated the implied chance for a half-point rate cut at the April 29-30 Federal Open Market Committee meeting. As recently as Monday, futures dealers saw a 50 percent chance for an aggressive cut this month.[7] "The answer, to be curt, is not to compound the bad by repeating the oft-prescribed remedy of inflating our way out of our predicament with a wing-and-a-prayer promise that it can always be reined in later," Fisher said, speaking at an event in Chicago. He reiterated his belief the Fed's best tools to combat the current threat to the economy rests in its expanded or newly launched initiatives aimed at providing liquidity to financial markets. Fisher is currently a voting member of the interest rate setting Federal Open Market Committee, and he formally opposed the Fed's last two rate cuts.[2]
Plosser voted against the FOMC's decision in March to lower the funds rate by three-quarters point, as did Dallas Fed President Richard Fisher. Speaking in Chicago on Thursday, Fisher restated his "strong reluctance" to more interest rate cuts.[7] The Fed has lowered the overnight lending rate between banks by 3 percentage points since September. Two points of those cumulative cuts came in the first 11 weeks of 2008, the steepest reduction since the federal funds rate became the principal tool of monetary policy around 1990.[1]
Dealers now see 2% as the low point of the current fed funds rate-cutting cycle, compared with the current 2.25%. A slew of Fed policy-makers from across the ideological spectrum this week cast doubt on the need for more rate cuts to shore up the economy at a time when inflation pressures are evident.[7] Inflation also is becoming a worry. Earlier this week, the government said consumer inflation had climbed 4 percent over the past 12 months, reflecting relentless gains in energy costs, which are up 17 percent over that period, and food prices, which are up 4.4 percent. "Inflation is a problem now," another Fed member, Richmond President Jeffrey Lacker said?? Friday. And the slowdown in the U.S. economy, which normally helps moderate inflation, may not have as much impact this time, he added.[7] "The economy will be improving. The inflation pressures are only intensifying at this point.'' While Maki, a former Fed economist, is forecasting the Fed will stop for the rest of the year after a half-point reduction to 1.75 percent this month, the chance of a quarter-point move increases if financial markets improve, he said.[1]
"Economic conditions have weakened," the Fed report stated. Many analysts believe the economy has fallen into a recession, predicting that economic activity contracted in the first three months of this year and is still ebbing.[8] Even with the rate reductions, though, consumers have turned more cautious, the Fed report suggested. Consumers are major shapers of the economy because their spending accounts for such a big chunk of overall economic activity.[4]
"Consumer spending was characterized as softening across most of the country, with some districts reporting year-over-year declines in retail and or auto sales," the Fed report said.[4]
The response of companies in the service sector has been more mixed, the Fed said, "in part due to differences in competitive pressures." Overall, most of the Fed's regions reported "little change in retail price inflation," the Fed report said, suggesting that producers _ and their profits _ are getting hit by rising energy and raw material prices.[8] Businesses must cope with higher prices for food, fuel and energy products and many raw materials, the Fed report said. "Most manufacturers have or are planning to increase prices" in response to such rising costs, the Fed said.[8]
Industrial production, a key measure of the economy that is considered in deciding whether a recession has occurred, rose 0.3 percent last month, the Fed said in a separate report.[5] Even Fed Chairman Ben Bernanke recently acknowledged for the first time that a recession was possible. That was a rare utterance of the "r" word for a Fed chief. The government later this month will report on the economy's first-quarter performance.[4]
Different types of Government's, Different types of economy, and different types of Religion. The strongest of all three of these has existed in one place for over 200 years. You guessed it right here in the old USA. This whole thing starts with a huge success in our economy. Everyone says they hate us for our freedom and prosperity. The truth of the matter is the one's that hate these qualities, are actually the small number of people that prospered from our free market Economy in the industrial age. At the same time they where becoming rich from our system and enlightenment was also rising up.[2] Janet Yellen, president of the Federal Reserve Bank of San Francisco, said in a speech Wednesday that the economy "has all but stalled and could even contract over the first half of the year."[8] At a conference being held in Charlotte, North Carolina yesterday, Richmond Federal Reserve President Jeffrey Lacker was on hand to answer reporters' questions. Predictable queries were followed by canned answers until Lacker was asked whether or not he thought the economy was in a recession. His response? He said "It is important not to get wrapped up in dancing on the head of a semantic pin." If it were me, I would have been dumb enough to say 'yes' or 'no.' Guess that's why he's running the show there in Richmond.[6] "I think there are important questions on the table about the structure of regulatory authority and responsibility at the national (level)," Richmond Federal Reserve President Jeffrey Lacker told reporters on the sidelines of a conference here. "But no matter how that comes out, I think the structure of the Federal Reserve system has served this country very well and in my view it ought to be preserved," he said.[9]
You don't want to dilute existing shareholders? Well, dilute them," McCulley urged. "A more forceful move by the Fed beyond moral suasion on capital raising is necessary to fix that problem," he said. Bankers and policy-makers spent two days talking about credit strains and systemic risk as financial markets battle to regain their footing from the shock of the collapse of the subprime mortgage market. Richmond Federal Reserve chief Jeffrey Lacker said he was confident that measures taken by regulators and financial firms to make the system safer would yield results, but were not a silver bullet for current market woes. "I am confident myself that the result of this (regulatory) response will be broadly beneficial, and will result in improvements in the efficacy of financial arrangements, even if the response doesn't result in the complete absence of financial market turmoil from now on," he said.[10] A plan by the U.S. Treasury to shake up the country's financial regulators in the aftermath of the collapse of the subprime mortgage market has questioned whether the 12 regional Fed branches should continue to supervise state-chartered banks. It recommended a study "that examines the evolving nature of the Federal Reserve Banks," which has alarmed Fed insiders, who fear they are in the firing line as U.S. lawmakers debate the housing crisis during a partisan election year.[9] CHARLOTTE, N.C., April 17 (Reuters) - The Federal Reserve's highly decentralized system is an asset that should not be tampered with as policy-makers review modernizing the country's financial regulations, a top Fed official said on Thursday.[9]
CHARLOTTE, N.C., April 17 (Reuters) - The U.S. economy is going through a contraction but inflation is too high and may not abate as hoped, a top Federal Reserve policy-maker said on Thursday.[3] When volatile food and energy prices are excluded, prices rose 0.2 percent. Businesses have resisted passing along the higher costs of their raw materials to consumers -- which is keeping "core inflation," or the increase in the prices of goods other than food and energy, within a zone that the Federal Reserve can live with. "It's hard for them to pass along higher costs when the consumer is on the ropes," Menegatti said.[5] With inventories of unsold goods starting to pile up, retailers in the Richmond, Va., and San Francisco regions have canceled orders, the report noted. Lofty energy prices are squeezing businesses' profits and pinching consumers, leaving them with less money to spend on other things. That is putting a damper on economic growth and adding to inflation pressures.[8]
Quite a few analysts have repeatedly noted the relationship between the falling dollar and the rise in oil, gold, and other commodity prices. This factor is exacerbating the supply/demand and political fundamentals which have created the mighty bull market in oil prices. Now, what we are wondering is just this: does the degree of price appreciation in oil (and gold) signify a regression of the global economy to an essentially BARTER ECONOMY? In a barter economy, those who possess the most valuable goods are able to increase their own wealth, both absolutely and relative to those holding less valuable goods. This type of economy PRECEDED the development of sophisticated financial instruments (e.g., money and gold deposits, and subsequently, non-precious metal-backed fiat money). In a barter economy, the storehouse of value, of profits, of accumulated capital resides WITHIN the valuable commodity or productive asset ITSELF. Eventually, such an economy evolves into one in which the storehouse of value becomes some universally recognized and accepted medium, a medium which in and of itself contains important inherent attributes desirable to human beings.[2] What we have in mind here is: GOLD. Gold was dismissed by the great economist, John Maynard Keynes, as a "primitive relic." We think the answer to this question MAY BE AFFIRMATIVE, though we are not yet ready to declare it to be so. The grievous losses suffered by holders of, investors in, and repositories of, the financial instruments which represent fiat money are moving those who possess valuable commodities to move away from the financial, i.e., fiat money-based economy.[2]
Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics. [2] Manufacturers and others businesses, meanwhile, were walloped by zooming prices for energy and other raw materials. Their ability to jack up retail prices to customers was mixed, with some companies restrained by competitive pressures, according to the Federal Reserve's new snapshot of nationwide economic conditions released Wednesday.[4]
Economic conditions have weakened almost across the board in the past six weeks, according to the "beige book," a compilation of anecdotal reports about business conditions from around the United States prepared by the Federal Reserve.[5]
CHARLOTTE, North Carolina (Reuters) - The Federal Reserve should threaten banks to make them raise more capital as a step toward restoring faith in credit markets, central bank policy-makers were urged on Friday.[10]
Rising federal deficits and the Fed's to keep interest rate low that Wall Street wants are the two main reasons why dollar keeps falling. This is also the reason why precious metals and commodities keep going, which only makes inflation worse. It doesn't matter. [2] Because most of the world resources for the past few years are in the form of million of houses that are not sold. The resources such as metal,cement, steel,energy (in building them). These all happen because of Wall Street banks (chasing crazy profits), Greenspan (low interest rate for too long) and etc. One more thing if China in India achieve the level of prosperity let say same as a country such as Singapore, the world inflation will be double digit.[2]
The Fed's current structure of a centralized Board of Governors in Washington and 12 regional branches -- whose presidents vote, on an annually rotating basis on interest rate decisions -- was established by Congress in 1913. The Fed currently supervises bank holding companies and state-chartered banks that opt to be members of its system.[9] If banks really need extra cash, why don't they pay more interest on their CDs and saving accounts? It seems that the U.S. government tries to solve its enormous problems by making dollar even cheaper. They will continue to lower the interest rates for as long as the American people will let them.[2]
The Fed will continue to cut rates and bury the dollar as long as it helps prop up failing balance sheets, keeps the big boys in business, and prevents another economic depression. Deflation will NOT be a concern at this point because they will not allow these false profits to fall. If this system was allowed to adjust based on reality, we would be in our second year of deflationary depression, but the big boys are NOT going to allow this to happen. [2] "The risk of another half-point cut by the Fed has been vaporized and odds of a quarter point cut are even being whittled away," said strategists at Action Economics. "This has been reinforced by the 2% surge in the Nasdaq, and a plunge in risk aversion as measured by the Vix volatility index back under 20, compared with 35 on 'Bear (Stearns) Monday'," they said. The market, which had fully priced a quarter-point cut for the past month, by midday Friday showed only an 82% chance that the FOMC will cut rates at all this month.[7]
Analysts also noted a comment from San Francisco Fed President Janet Yellen, who on Wednesday said that inflation is a "problem" and the Fed must be careful not to cut rates too far.[7] Speaking at a press conference following the Richmond Fed's Symposium on Credit Markets in Charlotte, North Carolina, Lacker said the credit crisis is "not over yet." He also said he is "uncomfortable" waiting for a slowdown to dampen inflation, as he is not convinced inflation will moderate. Lacker declined to say if he would have dissented on the rate vote had he still been a voting member.[11]
The British Bankers' Association said it will speed up a review of how money-market rates are set amid concern that some contributors are providing misleading quotes. The Fed last month, in its first extension of credit to non-banks since the Great Depression, opened up lending to Wall Street securities firms at the 2.5 percent discount rate and agreed to rescue Bear Stearns Cos. from bankruptcy.[1]
Pimco's McCulley said the Fed has "stressed that a lower fed funds rate by itself as a solo tool can't cure all that ails us.'' That's an "open invitation for fiscal authorities, regulatory authorities and the private sector to pick up some of the load,'' he said. "It doesn't mean the Fed won't ease a lot more if it has to, but it would prefer to have some partners, if you will.''[1] The Fed, which has been cutting rates since September to bolster the economy, turned much more forceful in January, when conditions took another turn for the worse.[8] The Fed snapshot "either portrayed a slowdown in already subpar economic growth or a deepening recession," said Michael Gregory, economist at BMO Capital Markets, who predicted a quarter-point rate reduction.[8] Falling U.S. house prices and the collapse of the subprime mortgage market have chilled growth and Lacker acknowledged the economy had faltered. He ducked the question of whether the economy was now in a recession. "It is important not to get wrapped up in dancing on the head of a semantic pin," he said. "I am expecting a contraction in economic activity in the first half of this year.[3]
Declines or downward pressure on home prices were reported in many Fed regions. The Commerce Department, in yet another report Wednesday, said home building sank in March to its lowest point in 17 years, fresh evidence of the depth of the housing market's woes.[4] Merchants _ other than auto dealers _ reported sales were "sluggish or declining" in 10 of the Fed's 12 regions, the report said.[8]
The Fed regions of Chicago, Boston and Richmond, for instance, reported factory activity was rising _ but not substantially.[8]
Kohn asked McCulley and other panelists at a credit market symposium hosted by the Richmond Fed whether market strain had persisted and whether the Fed's actions to relieve strain were working.[10] Not least, our society dictates you are no one without good credit and most credit counselors will tell you to open an account and carry a small balance for credit purposes. This Fed and this administration has allowed this BS for far too long and it's time to get a handle on it.[2] IF they cut again, I'm filing rape charges against the Fed. There is no consent for this from the governed aside from the street.[2]
The central bank also began auctioning up to $200 billion in loans of Treasury securities. "I wouldn't rule out the idea of the Fed either increasing the size of their current operations or even switching to other possible tools to ease the situation,'' said Maki of Barclays. "I would be surprised if they're feeling more comfortable on the term liquidity issue at this point.''[1] Why bog yourself down with pesky economic details that could mean the difference between comfort and poverty for millions? Maybe recessions are like good art - you'll know it when you see it. It had to be a Jedi mind trick - there's no other way those journalists could have let that slide. Feeling emboldened by his brilliant explanation, I marched down to a local bank and requested they cash out the $50,000 in my checking account. When they told me I didn't have an account there and they had no idea who I was, I just said "It is important not to get wrapped up in dancing on the head of a semantic pin."[6] All joking aside, one of the important news items that got buried on Friday under Google's ( GOOG ) news was Wilbur Ross' intent to buy stakes in some distressed small banks. I don't know which banks he has in mind (though it's not like there are only a few struggling small/regional banks right now - he has 100 to 200 in mind). He's reportedly trying to get together about $4 billion for the effort. He's also fishing for overseas partners to chip in part of the $4 billion. The word is, he'll be in Asia next week talking to potential co-venturers. He's also shopping the idea to potential partners in the Middle East. His interest in acquisitions is no big deal - that's what he does.[6]
If price goes down, it gets higher weighting. This is all data manipulation no matter how you look at it. It has a meaningful impact on artificially understating true inflation.[2] Under a gold standard, governments cannot enrich themselves by imposing the hidden tax of inflation on the people. Governments lose power to the same degree in which Gold re-assumes its role as the foundation of the world financial system. Even with the few true freedoms that still exist in this country (despite the decades-long, relentless onslaught by our political and financial elites), especially when compared to the Islamic world, American industriousness, innovation, and ingenuity will outperform the Muslim countries any day - as they have with 'we the people' even under a pure fiat system. That is the irony of it all.[2]
"I don't believe that is fair for me to pay my bills on time and live by the rules of the contract and still be penalized". "This system must be reformed so that customers like me are treated fairly and equitably." Thursday's hearing, which marked the fourth time in the past year that House lawmakers tackled the issue, has become an issue that has taken on more relevance as Americans face rising unemployment, rising inflation and have had to increasingly rely on their credit cards to make ends meet'. These clowns are raising rates on previously charged purchases. Just how long will it take this administration to sit up and do its freaking job??????? Inflation is moving at near hyper-speed and drowning the masses in yet more debt.[2] Now insurance companies require your credit report to determine how much you should pay for your auto policy. Where in the hell does it end??? This loophole robbery of the American people by big business''. CNN: Lawmakers were captivated by the credit card horror stories presented by three individuals Thursday, including that of Susan Wones, a Denver woman who said the rates on her multiple credit cards spiraled higher even though she stayed below her credit limit.[2]
Those are the unpleasant conclusions of several government reports released yesterday that, together, offer a picture of a U.S. economy being squeezed from all directions. [5] Unless I am mistaken, the U.S. stock market (predominately driven by multinational corporations) has disengaged itself from the actual U.S. economy.[2]
Raines, 59, a prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is valued at $24.7 million. The stock options were valued at $15.6 million at the time they were issued to Raines, allowing him to buy shares at $77.10 and higher.[2] Under the settlement, civil penalties of $2 million for Raines, $750,000 for Howard and $275,000 for Spencer are said be covered by the company's insurance policy for officers and directors, and stock options to be forfeited could be worth little. Howard's attorney, Steven Salky, called the settlement a "capitulation" by The Office of Federal Housing Enterprise Oversight, "reflecting that its concocted claims never had an ounce of merit."[2]
Chairman Ben S. Bernanke and the rate-setting Federal Open Market Committee next meet April 29-30 in Washington. Stocks rallied and Treasuries dropped this week as investors reacted to earnings results that topped analysts' estimates and pared their anticipation of Fed action.[1]
Oil is too high and if the Fed keeps cutting, Oil is the only place for money to go and the price goes higher.[2] In a separate report Wednesday, the Fed said big industry production nationwide rose 0.3 percent in March, an improvement from a drop of 0.7 percent in February.[4] Most Fed regions saw a "continued slide" in demand for goods related to housing construction, the Fed said.[4] Business has slowed in nine of the 12 regions in which the Fed divides the nation, and consumer spending was "softening across most of the country," the beige book said.[5]
"I think the most important thing for the Fed to do is not just use moral suasion, but a baseball bat with respect to the banking system," Paul McCulley, managing director at bond fund manager PIMCO, told a conference in response to a question from Fed Vice Chairman Donald Kohn.[10] "The Fed is nearing the end of the easing process,'' Pacific Investment Management Co. fund manager Paul McCulley told reporters following a speech in Charlotte, North Carolina, yesterday. "I think they have signaled that.''[1]
The great miscalculation of the Jihad-freaks lies in thinking that by giving birth to the gold Dinar, they will topple America itself. They will help cut out a cancer that has been eating away at not only America, but the entire world of the last three decades; and that cancer is a purely fiat-money, debt-based, lying U.S. financial systems. The real question is not: will the gold dinar or the U.S. dollar prevail? The real question is: Which of these two monetary systems will prevail: honest gold, or lying paper? What the Islamists do not understand is that the private ownership of gold, and a financial system based on gold convertibility, is the greatest guarantee of individual Liberty that has ever existed, and individual Liberty is what extremist Muslims are essentially attacking when they attack America, for their own system abhors individual liberty - especially of the religious kind. [2] The effect of the rate cuts is killing the economy as funny as that may seem.[2] This probably affects about three of you reading this, but I found it to be prototypical back page fodder. Iceland's finance minister Arni Mathiesen said the economy there was fine, but that their currency was undervalued. It was his response to Standard & Poor's decision to cut the country's currency rating (which is ultimately rooted in the strength of their economy).[6]
The economy is slowing across the nation, the home-building sector is tanking more than even the pessimists could have imagined a few months ago and prices keep rising at an uncomfortably high rate.[5] "Today's news confirms a lot of what we've been hearing and how people have been feeling about the economy," said Mark Vitner, a senior economist at Wachovia.[5] A severe global recession or a sudden plunge in the Chindia economy, reinforcing a modest demand decline in recession-hit America and perhaps other important developed economies which are major consumers would be needed to impact the demand side of the ledger.[2] I've said it before and will say it again; without that 70 %( the consumer) we at the top have nothing and no one to hock our crap to. Greed need not crush our economy!! Many have said as early as today, the next bubble has formed and will soon burst; only this one may actually bring relief to the consumer.[2]
The government reported Wednesday that consumer prices went up by a relatively modest 0.3 percent in March. [8] Warsh, in a speech about financial markets on April 14, included a warning that "we also need to be alert to risks to price stability,'' citing higher food and fuel prices that are "putting upward pressure on core inflation and inflation expectations.''[1] Greenspan argument was it is not appropriate to review YOY cost increase of steak, because during rising inflation consumers would switch and buy more hamburger meat. This new model falsely understates true inflation.[2]
On Wall Street, investors _ buoyed by upbeat earnings reports from JPMorgan Chase, Intel Corp. and Coca-Cola Co. _ looked past the downbeat economic news.[8] Either the dollar will collapse and become a toilet paper and foreigners who are buying our paper will revolt and gold standard will return, or T-bills will sell-off sharply and yields will rise and the country will go into deep recession to ultimately balance the economic forces. Either one is bad, but I'll take the latter.[2] "I'd be uncomfortable just waiting for economic slack to bring down." Those who may be more inclined to favor rate cuts the rate cuts market participants are betting on have spoken with softer voices.[2]
SOURCES
1. Bloomberg.com: Worldwide
2. Economics Blog : As Rate Cuts Loom, Inflation Hawks Strike Back
3. UPDATE 2-Fed's Lacker says inflation is a problem | Markets | Markets News | Reuters
4. Fed: economy weakened further in the spring - Forbes.com
5. Reports Offer Grim Picture of Economy - washingtonpost.com
6. Minyanville - NEWS & VIEWS-Article
7. Speculation Grows Fed May Be Done Cutting Rates - Economy * US * News * Story - MSNBC.com
8. Fed: economy weakened further in the spring | Chron.com - Houston Chronicle
9. Lacker: Don't mess with the Fed regional structure | Markets | Markets News | Reuters
10. Fed should wield baseball bat over banks: PIMCO | Reuters
11. Canadian Economic Press - Welcome
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