the Bernanke put, march 2008 edition
So today the FOMC meets and will announce possible rate cuts at 2:15EST. Most predictions are for a full 1% drop - in addition to the quarter point "emergency" cut from yesterday.

I'm not in favor of this. Why? Here's a nice quick summary. "...Inflation, debasing the dollar, punishing savers, and making travel abroad exhorbitantly expensive..."

This would all be well and good if we were a nation without savings. Oh, wait, that's what got us here in the first place. For the first time in recent history, the average homeowner's equity is less than half of the total value of their house; the national savings rate has been negative or very low for years... the list goes on. It's great for those people; their debt is worth less. For the more fiscally responsible - particularly non-homeowners such as myself - it's a punishment, as our savings is reduced in value by this sort of action.
- posted by vcmc @  3/18/2008 11:11:00 AM