X86BSD

JPMorgan: Expect Fed to Cut to 0% in January

Disgusting. All of this is disgusting. We are now on a way street to a depression to top all depressions. The ignorant masses of American voters have allowed the FedGov to destroy this country, and its currency.

If the government wished to end this entire mess as quickly and painlessly as possible it would have done nothing. Let the freaking markets ADJUST!

Let prices come down and stabilize the housing market. Let industries and companies fail. But alas as per usual their policy since the great depression which was caused by their wrongful thinking has led to another much worse depression. The dollar will crash this time.

How can the government interfere with and delay market adjustment? Lets see...

*
(1) Prevent or delay liquidation. Lend money to shaky businesses,
call on banks to lend further, etc.

(2) Inflate further. Further inflation blocks the necessary fall in
prices, thus delaying adjustment and prolonging depression. Fur-
ther credit expansion creates more malinvestments, which, in their
turn, will have to be liquidated in some later depression. A gov-
ernment “easy money” policy prevents the market’s return to the
necessary higher interest rates.

(3) Keep wage rates up. Artificial maintenance of wage rates in a
depression insures permanent mass unemployment. Furthermore,
in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher.
In the face of falling business demand, this greatly aggravates the
unemployment problem.

(4) Keep prices up. Keeping prices above their free-market levels
will create unsalable surpluses, and prevent a return to prosperity.

(5) Stimulate consumption and discourage saving. We have seen
that more saving and less consumption would speed recovery;
more consumption and less saving aggravate the shortage of saved-
capital even further. Government can encourage consumption by
“food stamp plans” and relief payments. It can discourage savings
and investment by higher taxes, particularly on the wealthy and
on corporations and estates. As a matter of fact, any increase of
taxes and government spending will discourage saving and invest-
ment and stimulate consumption, since government spending is
all consumption. Some of the private funds would have been saved
and invested; all of the government funds are consumed.15 Any
increase in the relative size of government in the economy, there-
fore, shifts the societal consumption–investment ratio in favor of
consumption, and prolongs the depression.

(6) Subsidize unemployment. Any subsidization of unemployment
(via unemployment “insurance,” relief, etc.) will prolong unem-
ployment indefinitely, and delay the shift of workers to the fields
where jobs are available.

The Federal Government is well on their way down the expressway of destroying this country, following their great depression inducing policies.

The best action the government can take is to do nothing! It's the quickest and least painful road to recovery. But what they have done and are doing is going to be SO much more destructive and cause these problems to last soooo much longer.

*Credit to Murray N. Rothbard