| It's been forecast by everyone but those beating | | | | Who can afford to borrow? |
| the Obama Democratic drums. Even today, many | | | | Meanwhile the Producer Price Index for Finished |
| pundits were saying that inflation wasn't going to | | | | Goods rose 1.4 percent in January, seasonally |
| be much of a concern but then Thursday | | | | adjusted, the U.S. Bureau of Labor Statistics |
| afternoon, Ben Bernanke & Boys raised the | | | | reported today. In January, at the earlier stages |
| Discount Rate from .50% to .75%! This is the | | | | of processing, prices received by manufacturers |
| opening salvo of interest rates that might have to | | | | of intermediate goods climbed 1.7 percent, and |
| reach DOUBLE DIGITS to contain the massive | | | | the crude goods index jumped 9.6 percent. On an |
| printing of money that's been going on. | | | | unadjusted basis, prices for finished goods moved |
| The Federal Reserve decided Thursday to boost | | | | up 4.6% |
| the rate banks pay for emergency loans. The | | | | The translation is? There is BIG trouble ahead. |
| action is part of a broader move to pull back the | | | | George Ure interpreted the data as follows. "The |
| extraordinary aid it provided to fight the worst | | | | ugly thing here is that over three months we've |
| financial and economic crisis since the 1930s. The | | | | seen finished goods up 3.64% which annualizes to |
| move won't directly affect borrowing costs for | | | | what? Oh, 15.36% annual inflation at the finished |
| millions of Americans. But with the worst of the | | | | goods level based on the latest running |
| financial crisis over, it brings the Fed's main crisis | | | | three-month numbers. And that says WHAT? |
| lending program closer to normal. | | | | Compound that three-month period four times for |
| The Fed decided to bump up the so-called | | | | a year's worth and you get an implied crude |
| "discount" lending rate by one-quarter point to | | | | goods inflation of (might want to sit down for |
| 0.75 percent. The increase takes effect Friday. | | | | this...) 86.1%! |
| The central bank said the action should not be | | | | Whatever number you want to plug in it doesn't |
| viewed as a signal that it will soon boost interest | | | | matter because it all spells doom. Bush started |
| rates for consumers and businesses. Want to | | | | this whole MESS; however, Obama is making it |
| bet? Record-low borrowing costs near zero are | | | | ten times worse. I sincerely do not think he |
| still needed to foster the recovery, it said. The | | | | understands what he's doing. I'm giving him credit |
| Fed repeated its pledge to keep interest rates at | | | | by saying he and his team are over their heads |
| "exceptionally low" levels for an "extended period." | | | | and instead of admitting it, they're moving |
| But with unemployment still near double digits, and | | | | "bull-headed" for the cliff. And, we're with them in |
| demand for loans remains weak, many ordinary | | | | the crash! |
| Americans and small businesses have found it | | | | Or, must we be? |
| difficult to borrow. | | | | |