Great letter to the editor in the Business Section of the KC Star today.  Also a few charts that were interesting from a poster at Big Picture.

Have a great weekend….

_________________________________________________________________________

I’m going to forecast the future for you. It’s what I did last September for the president of the Federal Reserve Bank of Kansas City when interest rates were lowered.

Webster’s says inflation is “an increase in the volume of money and credit relative to available goods resulting in a substantial and continuing rise in the general price levels.”

The Federal Reserve began lowering interest rates while at the same time it began bailing out Wall Street billionaires by pumping in hundreds of billions of dollars that really didn’t exist at the expense of the middle class.

What is going on now is the same thing Alan Greenspan did in an attempt to manipulate the economy. Lowering interest rates led to a subsequent rise in home values, and the bubble was created. Then it broke.

Now we are making the same mistake all over again, causing a bubble in prices. We are trying to control recession and are causing inflation, and this bubble will burst, too. It will cause depression, and when that happens and people get hungry, what will they say? Let them eat cake?

We did not learn from our mistake of lowering the interest rates and causing the housing bubble. When one makes the same mistake over and over again, it is called stupidity. With depression, there is widespread unemployment and people get hungry. We don’t have a risk of recession. We have a risk of runaway inflation followed by depression.

This rebate isn’t going to help anything. It’s like putting a bit of sugar in a crying, hungry baby’s mouth. . It’s fuel for inflation. It’s money that doesn’t exist. It’s just one more nail in the economy’s coffin.

Everything that has been done since last September is an attempt to help the extremely rich at the expense of the middle class. They give credit cards to anyone and charge 25 percent interest. Those who don’t pay are covered by the substantial, bill-paying middle class. —Dennis L. Maloney Prairie Village

_________________________________________

Monstrous Credit Bubble

Massive Housing Bubble

Dow as overbought as in 1929 and 2000: Click here: http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Dji200_0710.gif

Posted by Steve Barry

_________________________________________________________________________________________