I’m an American serving in the military and I’m definitely not here to do that.

“American are patriotic, positive and faithful citizens and the U.S. government is brilliant and its will and policies are lifeward, not self-destructive, else it would never has been a world super-power.”

If our policies were lifeward and our government brilliant, we wouldn’t be in the mess we are now would we?

“As economy recovers there will be strict regulations imposed to clean up and prevent corporate fraud. Coporate profits and banks’ profit will return to tax payers’ investment many folds. The world forever needs a leader and a Financial Standard.

Replace the first word with IF…and why do you think we should stay the financial leader? It was OUR irresponsibility that is bringing down the rest of the world.

“U.S.’s debt will be eradicated by world nations in due time as it did to its debtors.”

Do you have $53 trillion laying around to meet our budget obligations? I find it hard for the rest of the world to just roll over on that one. Don’t forget about the baby boomers qualifying for social security and medicare in the next few years…

“Gold price will go down to $400 after 2013 and will be oscillating beween 400 and $1,000 into the distant future, it will not be as doomsday sayers’ forcast of $5,000 or more per ounce.”

Perhaps, I think we’re in for an inflation problems next year but speculation abounds…

“U.S. will always maintain its status as the world supper power, both financially and militarily, for as U.S. ceases to be the world’s Standard, the current civilization, as we know it will follow one of Nature’s Bell Curves one dust to dust.”

I agree with you’re bell curve idea, I just wonder what makes you think that we are any different from any other empire of the past? History repeats itself, but I’m sure every great empire on the verge of decline told themselves that they would be the exception.

as a physics major in college I am interested in why V is called velocity in the above equation as M is money and P is money and Y is units. So you have money * velocity = money * units which means velocity = units. But there is no time element to the equation.

Now if Y was units per time period then you are talking then the equation makes sense. For x amount of money at some velocity y units per day you can generate what the price of goods are if you know the production of goods and services z per day.

But this seems to assume that money only moves as the goods and services do in the economy. But as the crash has shown us more money was lost than goods or services have been lost yet. We are at 7.2 percent unemployment yet the money supply at banks has gone from a high of 50 to 1 leverage to 10 to 1 leverage which means a drop of 80 percent in the money supply. Thus we should expect the unemployment rate to be closer to 80 percent and not 7.2 percent.

This math seems too fuzzy to be of any use.

That said, the amount of money being pumped into the economy must lead to either much higher taxation or to inflation. Higher taxation is probably politically unacceptable so the chance are that we will get inflation.

At that point, the Fed has to decide which is the worse of two evils. High inflation or a longer recession and adapt their policy accordingly.

In the meantime …… buy some gold.

Those are object any stimulus plans must be vicious foreigners or rich Americans who couldn’t care less about the economic survival of the nation. But as the ship of the American Empire sinks, so will all crews of Americans on it.

Government must exercise any means and any stimulus plans available and time may be running out. There is no better plan then letting rich investors in WallStreet to jumpstart the economy by initiating euphoric ecstasy of investment activities. The economic problem was caused by the financial sector, the solution must come from the financial sector.

This is only a valid point if lower rates from the fed will stop a depression. They wont. They will, in fact, make it deeper and longer.

If we had been willing to go into a recession after the dot-bomb, we wouldn’t be going into a depression now.

Take your medicine kids.

May God bless America.

There are worse places in the world to live. Imagine living in Argentina during their last financial crisis. Lenders (bank depositors) were not allowed to withdraw their funds from banks over 1 year. And, when they finally could have their funds, the funds were devalued by 1/2.

You never can tell when changes in the Fed rate will have an impact on other lending rates. If this were not true in the past it is certainly true now. The Fed rate is essentially at zero and some other rates have followed such as CDs, Treasuries and US Agency note rates. Other rates have not, in fact muni bonds are going for almost absurdly high rates. In recent weeks you could buy muni bonds with a 30 year maturity for as much as 8%. That rate will not create inflation. And remember that interest is tax free so If you invest in munis at 8% it is like getting a taxable return in the neighborhood of 10%, plus munis with a B rating are ten times less likely to default that corproate bonds with a A rating.

If I was one of you retirees out there I wouldn’t be complaining about low CD rates, I would be buying as many muni bonds as I could.

Mortgage rates certainly have not reflected the drop in the Fed rate, nor have car loans or credit card rates.

Let’s not forget that, according to the laws of supply and demand, inflation is caused when you have too much money chasing too few goods. In a shrinking economy (i.e. a recession) the opposite happens. We will not have inflation until (and unless) demand for goods out-strips the production capacity.

By the way, blaming te housing and oil bubbles on low fed rates in the 90s is naive and comes from those who blame the government for everything bad that happens and unquestionably extoll the virtues of the free market.

Given all of that, I am nervous about the low Fed rates. When you get beyond the basis of the science of economics it is not very good at predicting the long term effects of any action made by any player, government, individual or corporation that has the ability to unilaterally take actions on such a scale that it can impact the entire economy. We should remeber that before we become profits of doom based on current conditions and the action that are being taken to improve them.

Companies raise prices only when they either must or think they can get away with it — which amounts to when their competitors will follow the price increase instead of trying to seize market share by keeping prices down.

When the physical plant to increase output already exists but significant portions are idle, companies usually try to seize additional market share instead of following a price increase. It is only when variable costs [such as labor] go up or companies are operating near capacity that they follow price increases and thus create inflation.

In the present environment, plants and factories are not operating near capacity and labor costs are quiet. Thus, companies have little pricing power or may try to expand markets by lower prices, instead of raising them.

While inflation isn’t dead, it is dormant. For a while, we can probably get away with almost zero interest rates and lots of available money.

Of course, if Congress decides to “help” the worker by mandating significantly higher wages, or higher health benefits, or a tax in lieu of such benefits, then variable costs will go up and you’ll see inflation in the face of low interest rates and loose money.

could inflation pop up??? Du ya think??? Duh???