For weeks now I have been musing over why the Fed hadn't lowered the rate. I saw the foreclosure rate soaring, property values dropping, interest rates climbing, and mainly just a lot of pain on "Main Street". I was screaming for everyone I believed by blogging here and complaining that the Federal Reserve seemed to be detached from reality. There must be something to it...I still believe that I was right because here they are lowering the rate...but is it really what they should have done...and WHY did they do it?
I think they did it because of the sub-prime meltdown and the Wall Street loses that were starting to add up. Perhaps the members of the Fed Board were looking at their retirement portfolios and thinking..."this is not good, if we don't do something fast I will be working til the day I die". Something like that. In other words they lowered the rate to help Wall Street and themselves. The fact that it will probably help the mortgage industry and maybe even the real estate business and a few homeowners/ investors/ builders/ developers probably didn't even cross their minds...right?
The problem is that now Wall Street is loving this...all of the recent paper losses are being erased in a matter of a day and everyone is happy again...or are they?
Does anyone ever travel outside of this country? The dollar is practically worthless and it appears that gold will be over $1000 an ounce someday soon...the Canadian dollar, which was always worth about 30% less than the US dolar is now practically at par with our currency. The Euro? Don't even think of going to Europe anymore...we pay twice what everything is worth in Europe with our money...in other words...we just want easy credit...cheap money (interest rates)...and ever rising real estate prices. We want a fantasy...but are we willing to pay for it? I don't think so.
The Fed has helped a little bit here...they really messed up years ago and now have to bail us out...but at what cost? I hope the Fed waits before their next rate cut...I predict they won't though...I expect another 1/4% in a month or two...and I predict the dollar to keep losing value...maybe we should all start planning European vacations to see what is really going on with our economy before we pray for another rate cut...agree?
Comments(2)