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News From The UK: The Federal Reserve’s Rescue Has Failed.

Bet you will never see that on the front page of the New York Times…mass pandemonium would break out! From the London Telegraph, and interesting piece on how they see our economy:

The verdict is in. The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed…As the once unthinkable unfolds, the leaders of global finance dither. The Europeans are frozen in the headlights: trembling before a false inflation; cowed by an atavistic Bundesbank; waiting passively for the Atlantic storm to hit.

So to you money professionals out there, what do you think? I am no economist, but I find it a little frightening that most other countries seem to be more concerned about our economy than our own government is. Bush said the other day that our economy is “robust”…where does he get his information from?


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Comments (6)

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  1. DebtDieter says:

    Well here in Australia it’s pretty much assured you guys will be going into recession.

    It’s often said that when the US sneezes, Australia catches a cold. Our interest rates have gone up twice in the last 6 months though, and our dollar is really strong against yours now.

    I don;t understand why your government is lowering your rates, considering the situation you’re in?

  2. Lily says:

    Bush is delusional and has been for a few years. I think the Fed is genuinely concerned, as is any legislator with some understanding of macroeconomics.

    The global markets are so interconnected that it’s not unreasonable for foreign markets to worry about US challenges. The credit crisis is well on its way overseas; illiquidity, massive writedowns, and falling investor confidence mean bad news for everyone.

    But stuff like this happens all the time. Remember the Asian financial “flu” in the late 90s? I don’t panic because there’s nothing I can do about these global macro crises except be a smart consumer and investor.

  3. chris says:

    I think that Bush’s response (a few days back) when questioned about the $4.00/gallon gas looming in the near future kinda sums up the government’s entire view of our economy, don’t you?

  4. David says:

    What, his “you mean people actually pay for gas? How strange..” statement?

    Yea.

  5. Brip Blap says:

    Well, Papa Bush didn’t know about price scanners in supermarkets. It’s fairly clear that these bozos don’t know anything about normal human life.

    I thought the Telegraph article was slightly hysterical but I don’t disagree with the idea that the US is speeding into a recession. It’s bound to happen – economies cannot grow without pause forever. The US is long overdue for a recession, and then it will rebound. The Fed cannot stop a recession – its monetary powers are better suited to fighting inflation.

    And trust me, plenty of people in the US (including maybe even some sentient government officials) are concerned about this. It’s just if you look at the “news” channels on TV or the “liberal” print media that you don’t see it – but you’ll sure know about J Lo’s adorabubble twins!!

  6. fathersez says:

    The rest of the world have been happily selling to the US people and making money off them for so long.

    Perhaps, and I hope sooner rather than later, the growing middle class of China, India and other economies like Vietnam and Indonesia will be the new global customers.

    Then perhaps the sneeze effect of the US will no longer be felt.

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