Party On, Garth!
So Ben Bernanke and the Fed did the equivalent of dropping off a couple more kegs of beer at an out-of-control frat party today when they cut the Federal funds rate by a half point, which was followed by a corresponding cut in the Prime rate. They also reduced by a half point the so-called “discount window” rate—the rate Fed member banks pay to borrow directly from the Fed itself. This is the second time inside of a month that the discount rate was cut. Not surprisingly, Wall Street reacted like a bunch of hormonal teenage boys laying eyes on their first stripper.
The party is far from over, my friends. Party on!!! YEAH!!!
Anyone want to bet against the price of gold breaking all previous records? That the Chinese aren’t preparing to liquidate all their dollar-denominated assets in favor of gold or euros? Interesting times are ahead.
By the way, if you haven’t already, check out Sean Corrigan’s article “Twilight of the Gods” at Mises.org.