The Great Depression Online




Great Depression Online Archive Issue:

'Helicopter' Ben Lives Up To His Name

Inside This Issue You Will Discover…

*** Fed Cuts Benchmark Interest Rate a Half Point to 4.75 Percent
*** The Dollar is Damaged
*** Inflation over Deflation
*** And More

Fed Cuts Benchmark Interest Rate a Half Point to 4.75 Percent

Making good on his name ‘Helicopter Ben’, Federal Reserve Chairman Ben Bernanke cut the interest rate a half point to 4.75 percent on September 18, 2007.

The Dow went nuts, leaping 336 for the day.  But don’t get too excited.  For this is more of an act of desperation to buoy a collapsing housing market and an over extended credit system than a sign that inflation is on the wane.

The Dollar is Damaged

In fact, it is extremely damaging to the value of the dollar.  As Min Zeng reports on September 21, 2007, for Bloomberg…

“The dollar headed for a third straight weekly loss against the euro as speculation the Federal Reserve will continue to cut interest rates reduces the appeal of U.S. assets among international investors.

“The U.S. dollar has dropped versus all 16 most-actively traded currencies this week after the Fed’s first reduction in borrowing costs since 2003.

“’There is no end in sight for dollar selling,’” said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon in New York.  “’The interest-rate differential will continue to move against the dollar.”’

In other words, several things are likely to happen…  The dollar will most likely continue losing value in the international currency market.  And the U.S. stock market will likely go down as international investors pull their money to limit losses that they’d incur by a falling dollar. 

Inflation over Deflation

With this latest interest rate reduction, ‘Helicopter’ Ben is choosing inflation over deflation.  And that means that the purchasing power of your money, if you hold it in dollars, will continue to be eroded.

If you truly want to understand inflation and its end result – hyperinflation.  And if you want to have the knowledge to survive an inflationary recession, you can learn more here: http://www.thenextgreatdepression.com.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  If all this financial turmoil is causing you to lose sleep, my friend Bob Bly can help you.  To learn more about how Bob overcame insomnia without seeing a shrink or taking dangerous sleeping pills or other prescription drugs click here: www.ctcpublishing.net/cmd.php?Clk=1908977.

 

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