John, I hate to burst your belief system bubble, but here goes.... Sacrificing everyone's savings??? Dude, get a clue. Nobody has savings! That's why there is a negative savings rate. LOL Don't wanna sacrifice everyone's inflated home price just to save a few fuckin (sic) savers, now would we???
I posted this message in another thread, but I think this line of thinking is slightly misguided. For the credit bubble to take place, two things had to happen. First, bank interest rates had to come down. Second, RISK HAD TO BE PRICED ARTIFICIALLY LOW. Meaning, if risk is priced properly, no bank would allow a borrower to take extreme leverage. Particularly INFINITE leverage in the case of borrowers not fronting up any collateral. The secondary credit markets allowed bankers to heavily dilute risk and shove risk premiums to the wayside. Now that those markets are gone, banks realize that they will bear the FULL burden of risk exposure when making loans. All those speculators and idiots in over their head on their assets took too much leverage to purchase those assets. There isn't a bank in the world who will be willing to refinance this EXTREMELY risky debt unless the refinanced debt could be repackaged a sold to the secondary market. Again, this market doesn't exist anymore. This is exactly playing out like it did in Japan after its credit bubble burst. No matter how low the FED lowers the funds rate, it does nothing to stop risk premiums from growing now that everyone knows the credit game is up. RoughTrader
Worst of all he didn't even signal that this was a 'one and done' cut. The clear signal is that he is willing to cut more. So now, everyone will spend even less and wait for even lower rates to buy that car or house. So this cut may actually increase the odds of a recession.
Today Ben Bernancke single handedly made all the worlds natural resources more expensive for the ENTIRE WORLD. Gold at 27 year highs. Oil at all time highs. All commodities soon to be at all time highs for EVERY PERSON ON THE PLANET - just to bail out Wall Street gamblers.
Huh? All he did was raise it's price in dollars. And since the USD is now on a one way trip to hell, the rest of the world still pays relatively the same for natural resources. Think before posting, mate.
STFU idiot. Oil is up 2% today and USD no where near being down 2% vs. any currency today - therefore Oil is a lot more expensive today regardless of what curency you measure it in.