A rate cut of seventy-five basis points is going to pump a lot of liquidity into the system.
The stimulus package that is most likely going to pass Congress will do nothing long-term to restore fundamental soundness to the American economy. Rather the general price level will increase. Those rebate checks will mean nothing in a few months. We'll all be paying for it with higher prices.
The Federal Reserve has two tools at its disposal: Inflation and Blarney.
Today was an example of both of them. Secretary Paulson spoke about the strong fundamentals of the economy and the Mighty Bernanke Superbanker opened the floodgates of currency by lowering the fed funds rate by seventy-five basis points.
These people are nuts.