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The systemic failure of the Federal Reserve.

Posted by Adrian on February 27, 2008

On the 27th/28th Feb 2008 GMT  treasury Secretary Henry Paulson and Fed chief Ben Bernanke will appear before the House Financial Services and Senate Banking committees to explain to the panel that they will cut rates and deny that America is in a recession or will go into a recession.

The question is, if the the US is already in Recession (that may have started as early as December 2007). How will a constant rate cutting policy work?

Investment Bank Merril Lynch (who took huge write downs in the last quarters) says the US in recession and according to an Associated Press-Ipsos poll 61% of Americans believe they are now in a recessionary economy.

The horror of inflation, is it eroding any asset wealth left of the American populous. America is currently in stagflation, even worst on top is the high oil, food and utilities (electricity, water) costs.

So it is bad.

With the Fed in denial, printing money and having lost control of the US economy; the market censuses is that the Fed will cut rates (in March at next Fed meeting), Asian and South American markets have rallied spurred by the speculation of rate cuts.

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