The Federal Reserve cannot shake the easy-money monkey off its back.
The Federal Reserve slipped out and found its crack dealer again and burned up another $38 billion in emergency liquidity to prop up housing and stock prices even though they might still be overpriced at current levels.
Do you feel good now, Chairman Bernanke? You needed $24 billion yesterday. You needed $38 billion today. What about Monday? How much will you need on Monday?
"Fed funds climbed above 6% on Friday, reflecting uncertainty in the financial system, and the Federal Reserve Board said it was providing liquidity to facilitate the orderly functioning of financial markets" (Forbes).If we all marched off a cliff, would it be OK if we did it orderly?
Has the Federal Reserve ever heard of Adam Smith and the invisible hand of the market?
The Fed funds climbing above 6% is the market trying to tell the government that politicians are trying to force an unnatural, unsustainable policy--i.e., not only should the Fed not cut rates, borrowing is still too cheap.