Tuesday, March 18, 2008

Take my money, please

The .75 rate cut the Fed just announced was not enough to please Wall Street, stocks tumbled from the euphoric levels of the morning, but the fact remains that the Fed is now loaning money at less than inflation. Why not borrow?

Well, I just wrote the above and stocks have already jumped back up. My suspicion is that the Plunge Protection Team was given a pep-talk by Feckless Leader yesterday that made clear that the stock market was to be supported around this level (12,000 Dow) for the foreseeable future. How much money do these guys have to play with?

The administration is desperate to avoid political means in this crisis. Keeping it in the private sector masks both their incompetence and their total alignment with the money powers that created the mess. My prediction is that this is just the beginning, the monetary means that Bernanke has used so far are approaching their limits, and printing money will be the only option left for him.

When the next batch of T-Notes goes up for sale, the last disastrous auction may just be a precursor of the shipwreck of US government finances, when nobody will buy them. So, in the words of Feckless Leader, John McCain, and the captain of the Titanic, stay the course! You ain't seen nothing yet.


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