Tuesday, December 16, 2008

Rock Bottom

In a desperate attempt to stimulate the faltering economy and fight off deflation, the Fed dropped the target rate to 0 percent today. That means they've essentially relinquished one of the main levers they use to control the economy. We're in uncharted territory now. Just about all that's left to do now is to print more money--dollars that we're going to have to get rid of sooner or later to avoid runaway inflation. They're trying to put off the correction or at least spread it out over a longer period of time. But the correction seems all but unavoidable at this point, and it's going to be painful.

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