The Blitz never works

Here and here are two articles which reflect the pressures which Wall Street is trying to apply to the Federal Reserve for lowering Interest rates. Here is my dilemma: I have always wanted the Overnight rates to be pegged at 4.25% forever without change, and cannot fault the Fed if they cute the rate by 25 Base Points. The Economy, though, fails to meet the criteria for a Rate Cut. Mortgage rates have returned to Interest rate levels from which they will not decline. The DOW Industrial index is over 13,000, and cannot reach much higher numbers without inflationary pressures. The Slowdown for the next year is a basic restructuring to meet current Demand, and will not be viably altered by the presence of easy money. Little more Product will be produced, cheap money or not. The value of the Dollar has suffered drastically this year, and a Rate cut will incite foreign exit from their Dollar Holdings, probably without increase in the purchase pattern for American Products. Neither Wall Street or the Fed will gain from a Rate Cut, and it will provide an additional Shock to an already battered Economy.

Edward Hugh puts an intelligent Take on the stability of the American economy. The real factor remains the growth of foreign competition to American development, a reoccurrence previously seen in the 1960s with the rise of the Japanese economy. The real problem comes in the U.S. economy being tied to systemic technologies due to previous Capital investments in the technologies, while Developing nations placed initial Capitalization into sounder technologies. The whole situation will revolve to an improved American position with further Capitalization, though We currently have reached a certain plateau. The American economy is not going to disintegrate in the interim Period; it will simply redirect its Capitalization efforts. Efforts to propel faster change will fail, and stupid efforts to do so will worsen the situation. lgl