Fed orders emergency rate cut to 1.5 percent

On Glen Beck's show a couple of days ago, one economist said what I've been saying all along. We need to go back on the gold standard. If the US does that, then the rest of the world will follow.

Inflation = federal reserve printing that equal % of more money.
For instance if there is 100 dollars in cirrculation inflation of 10 % means the federal reserve printed ten more dollars and added them to the economy. So the money is then 110 dollars. This means there are more dollars and commodities increase in cost 10 % to catch those dollars.
Deflation is the best recourse. Stop printing money and there will be less in cirrculation and each remaining dollar will increase in value. So there is 100 dollars in cirrculation, remove 10% of those dollars and 90 dollars is chasing the same commodities. So commodities will decrease in cost.

Oh boy, here we go again. Dow below 9k, with a little under an hour to go. I hope it makes back some ground in that time.

While we are on the subject; what does the ever increasing evolution of the looks of the bills have to do with anything? Are they printing more than they shold to replace the old but still not getting all the old? How does this hurt us? I mean, it can't truely be as innocent as to thwart counterfiting.... Can it?

reply to post by fmcanarney


That part I knew already, what I was more interested in was the correlation between the interest rate and inflation..

Aaaaaand, the rate cut failed.

Bloomberg

The London interbank offered rate, or Libor, for three-month loans rose to 4.75 percent today, the highest level since Dec. 28. The Libor-OIS spread, a measure of cash scarcity, widened to a record. The overnight rate fell to 5.09 percent, still 359 basis points more than the Fed's 1.5 percent target rate.