$165 billion stimulus check and inflation question….?

Posted by admin on October 28th, 2009 filed in Gold against Oil

So….it’s great we are getting money–but does the Bush Administration/Federal Reserve know that by putting more money out into the system may create an inflationary problem on the US Dollar? (Ditto for the apparent auctioning of about $100 billion or so for the banks?)

I know there is a liquidity problem (Ace Greenberg, you can deny that ALL day long sir!)..although such an infusion of cash is good for banks—won’t this further erode the Dollar against some other major currencies (especially the Euro and the Yen?—especially since a lot of money is getting moved to commodities like oil and gold?????).

And now they are wanting to do another rate cut (possibly a 75 basis point cut)???? With all of this panic (yes, there is a PANIC going on folks)—why on EARTH would you want to further reduce the prime rate when the mortgage rates haven’t followed suit on the last major cut a few weeks back???

What the heck are those folks doing up in Washington DC folks??????
bakphx—yeah, but that begs the question—where is the government going to turn if the dollar kicks the bucket?

The worst thing is the rate cuts will make the dollar even weaker by making the US less attractive as a place to invest.

It’s like someday maxing out their credit card limit, so they increase the limit a little bit. Beats paying it back.

Edit-this administration plans to leave the mess for someone else to clean up. I have a feeling the next president will have hard decisions to make to clean up the mess. I personally think a recession is a part of the economic cycle, and you have to manage as such.