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Financial Reality Will Sound a Wake-Up Call for the Federal Reserve and the American Dream
In holding overnight rates steady at 2%, the U.S. Federal Reserve once again put forth its belief that, despite a cascade of horrific financial data, the economy is likely to continue to grow slowly and that inflation would moderate.
Although wrong on both counts, this view is consistent with the relative optimism that prevails across the country. After nearly two decades of an uninterrupted consumption binge, most Americans simply refuse to believe that anything can seriously derail the American economy. It’s a pleasant dream, but the wakeup call can’t be too far off.
The benign outlook on inflation is rooted…
13Aug2008 | Money Morning | Comments Off | ContinuedInside Wall Street: The Fannie Mae/Freddie Mac Bailout is Necessary – But Don’t Expect a Happy Ending
It’s the end of the “American Dream.” It’s the story of how the inevitable bailout of insolvent housing giants Fannie Mae (FNM) and Freddie Mac (FRE) – with the Federal Housing Administration soon to follow – will ultimately lead to such sorrowful sequels as “TheDeath of the Dollar,” “The Downgrading of U.S. Government Debt” and, yes, “The Depression.”
Let’s be very clear on one point, however: There’s no question about it – Freddie and Fannie have to be supported. If the doctrine of “too big to fail” didn’t already exist, it would have to be invented – immediately. Although many are arguing against…
15Jul2008 | Money Morning | Comments Off | ContinuedUnited States to the World: Be Careful What You Wish For
Do you hear the calls for a challenge to U.S. power? It is everywhere these days. Now that the Soviet Cold War threat has dissolved, who needs the United States to fend off the bullies in the global playground. Those who believe that economic prosperity and life will continue to be merry without U.S. leadership may want to think again. Better yet, can the global economy afford to exist without direction and leadership in general?
Let’s say the U.S. were to gradually lose power and influence to the point where nations either scrambled to defend themselves or formed alliances in…
29Apr2008 | S. Oakes | 1 comment | Continued
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