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 Posted: Fri Oct 30, 2009 6:32 am |
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the whole world is facing deflation:Contrary to the hysterical panic
you hear about inflation these days, it's actually not a problem,
Right now, the economy's capacity utilization and bank lending are so
low, that inflation isn't taking hold
click on the link for the video.
http://finance.yahoo.com/tech-ticker/article/363611/What-Happens-If-Fed-Blows-the-Exit-Strategy;_ylt=AhwU9IfnLSL1NV6bE5cs1m.7YWsA;_ylu=X3oDMTE1Zm5jdnYxBHBvcwM1BHNlYwN0ZWNoVGlja2VyBHNsawN3aGF0aGFwcGVuc2k-?tickers=dia,spy,xlf
What Happens If Fed Blows the Exit Strategy?
Posted Oct 30, 2009 11:25am EDT by Henry Blodget in Investing,
Recession, Banking
Related: DIA, SPY, XLF
Contrary to the hysterical panic you hear about inflation these days,
it's actually not a problem, says the FT's chief economics commentator
Martin Wolf.
Right now, the economy's capacity utilization and bank lending are so
low, that inflation isn't taking hold.
All that could change, however, if the Fed blows its exit strategy.
If the Fed waits too long to stop giving away free money, inflation
could start to gather steam. If the Fed tries to combat this by
raising rates, meanwhile, the shock could hit the stock market and
slow the recovery.
Wolf thinks the Fed will have to start making noises about raising
rates within six months--faster than most people expect. Martin also
thinks this move could hit the stock market.
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