Let me get this straight. I have been thinking again and I know that is dangerous.
central bank won't raise rates because he wants to save the banks and not the country. How did I get there? In a crazy round about way. Ben lowered the rates to save the investment houses and banks from the bad lending practices of the ARM's and no doc loans. You know where you can get a higher intress rate from the poor and hard working people who can't afford housing. ( ponsie skeem thanks to Allen greenspand). Enter good old Ben ( who studied the Great Depression) who has now lowered the lending rate to 2% and won't increase it. Hence the poor have been almost wiped out of homes and more to come and the rates will have to be raised. Why? Because the middle class with fixed rates will now accelerate their foreclosures because with the loss of jobs and high food and gas because Ben in his haste to save the banks have now made it almost impossible for the middle class to have food clothing and shelter. So now they are starting to pair back and hence more contraction and more job loss just like the Great Depression. Then the commercial real estate will go next. Strange that Ben was the person who was put in the job and that he studied the depression and here he is facing it. If you thought the 70's and 80's were bad with the S & L's were bad think again. 2 wars China India Iran and what not. If you think it is bad now add in floods in the Bread Basket and you will see how this will affect our spending. Outscouced jobs and what do we make anymore? Not much. Buy gold, pay of your credit cards,cars loans and most of all pay cash and plant a garden. Buy stock in the seed co. that sells to backyard gardeners. This is just the start of the end before we can get to the beginning again.