With his gallant tandem of half point rate cuts, Ben Bernanke not only set global stock markets on a two-day tear, he signalled his intention to steal away the savings of Americans by unleashing inflation. Gold and oil have obliged by setting new recent highs.
Has the Fed fixed things? Or has the Fed simply given the market a fix?
That first rush of credit back in the system has produced anticipatory shivers of joy, the way your mouth waters when you’re about to eat a spoonful of crème brulée. Or it could be short covering by terrified bears. The larger-than-expected cut in both the funds and the discount rate likely scared some bears into covering their shorts and getting out of the way of the credit junkies, who can be dangerous under the ecstasy of cheap money.
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
Comment by geoff on 20 September 2007:
anticipatory shivers of joy---ecstacy of cheap money===@=0 forget finance - this is poetry- keep it up i think i like it.