Thursday, October 13, 2005

Excessive Spending - The Next Recession

I'm going out on a limb now, but I think the 4th Quarter of 2005 will be viewed, retrospectively, as the beginning of a new recession in the U.S.

For those of you who did not read my post of September 16, check it out.

Here are some economic stories from Reuters:
The Fed is getting ready to pounce on the economy. Why? Well, apparently it sees that the economy is running out of energy (pun intended), so it is time to put on the economic brakes by raising interests rates further. For those of you with short-term memory loss, go back to 2000 when the Fed raised the prime to 8.5% for our own good. Alan G. did admit to a slight error in judgment on that action. Unfortunately, the Fed seems to have a short-term memory loss, but the logic is still consistent: when the economy is hit with natural disasters, energy market aberrations, job losses and currency manipulation by competitors, then it is time to cripple the economy by tightening the money supply and raising interest rates.

Econ 10000000000000000001