Old-Fashioned?

The Federal Reserve will have to stabilize the Dollar, if it continues to plunge, and this Morning’s Consumer reports are bad. I still have ten minutes before I can access them (real truth, I will await Others' hard work of going through them; follow my Comment tomorrow if bad). Bernanke and Co. thought they could pull off an easy Credit flow to steady their friends in the banking sector, but Europe Central Bank did not yield; and the Dollar began to spiral down. The aid to the Markets was only temporary, except for the rush for high-priced Oil. It is my belief that the coming Consumer reports will indicate that all measures by Congress and the Fed failed to bolster Consumer Confidence and Sales; Numbers mean nothing if they came entirely from Food and Fuel sales. We have heard the drumbeat of liquidity ever since 2000, and We missed the real rattlesnake in the wood pile.

Congress could achieve more with fiscal policy today, than could the Fed with monetary policy. I would personally like to witness the Bush Tax Cuts cut short early, prior to their expiration date. This is about as likely of occurrence as Congress accepting Term Limits. It would firm the Dollar on international markets, where Oil price is being driven upward as lower American Consumption supplies less need for Capital investment; Everyone holding excess Dollars except for American Consumers. The Republican Move in Congress will probably hold force, even though All recognize that Social Program funding will never be cut, and the ridiculous nature of Federal budgeting will continue through this Congress. Reliance on economic measures which have no hope of passage is as effective as the Bush Budgets being estimated with the Bush Tax Cuts expiring; though they actively seek continuance of the Tax Cuts. The World is moving on, but Washington insist on concentration of Second Millennium initiatives which failed even before the Period was complete.

John Palmer espouses a Sentiment with which I concur, the trouble being that the rest of the World agrees with that view; with the exception of the Federal Reserve, who insists the total number of registered Dollars out there makes no difference. There is an old-fashioned formula that you make a ratio of actual Dollars/actual physical GDP for some past Period of time, and compare it to a current similar ratio. You could with effort construct an entire Series of these ratios, including the past year with effort, and it might tell Someone something about the Inflation rate. Some Number-Crunchers even say such material could help explain the Inflation rate. I often wondered why gifted Mathematicians and Economists did not utilize this practice. Could it be that transparency does contain liquidity as Tyler and Felix asserts? lgl