There's not much I can add about today's 50 basis point rate cut by the Federal Reserve. I subscribe to the Jim Rogers / Marc Faber point of view that the Fed's role is to guarantee the soundness of the dollar, not to "bail out hedge funds." As both of them reiterate, there's doubtful logic in easing monetary conditions when it's easy money conditions that brought about the current situation in the first place. So, here's to helicopters as the dollar reaches record lows against the Euro. I am also on board with Nouriel Roubini that while rate cuts can solve liquidity problems, they can't solve solvency problems. Whether what's on hand is a solvency problem or a liquidity problem I guess we'll soon see.
Fed Shows Us the Money
There's not much I can add about today's 50 basis point rate cut by the Federal Reserve. I subscribe to the Jim Rogers / Marc Faber point of view that the Fed's role is to guarantee the soundness of the dollar, not to "bail out hedge funds." As both of them reiterate, there's doubtful logic in easing monetary conditions when it's easy money conditions that brought about the current situation in the first place. So, here's to helicopters as the dollar reaches record lows against the Euro. I am also on board with Nouriel Roubini that while rate cuts can solve liquidity problems, they can't solve solvency problems. Whether what's on hand is a solvency problem or a liquidity problem I guess we'll soon see.
