I’m getting tired of hearing people like George Soros happily declare subprime proves “free market fundamentalism” will ruin the financial sector. How anybody can describe a system in which the price of money is fixed by a few secretive men in a marble palace “free” or “market” is beyond me. This crisis is not a failure of market, it’s a failure of government.
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Many on the street have accepted a common misconception that threatens to ruin your portfolio. They want you to believe a temporary end to Fed rate cuts will somehow indicate a shift to hawkishness with regards to inflation. That’s total nonsense. Interest rates do not need to be in continual decline to influence inflation, simply maintaining interest rates at a low level will do the trick. Inflation is not caused by the slope of rate changes, it is literally the new money pumped into the system.
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