Or maybe they shrieked, as the Fed yesterday confirmed it’s helpless to prevent a double-dip recession.
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Additionally, the Fed is publicly fearful of the risk of economic and financial contagion from Europe’s debt crisis — and that’s a problem that the Fed has no real weapon to fight. Although FOMC Chairman Ben Bernanke has made cautious statements about European debt in the past, Wednesday’s tone was clearly different from, for example, his August 26 speech in Jackson Hole, Wyoming, when he said “I have confidence that our European colleagues fully appreciate what is at stake in the difficult issues they are now confronting and that, over time, they will take all necessary and appropriate steps to address those issues effectively and comprehensively.”
Thus, it’s not surprising that in addition to stock prices and bond yields dropping, both typical of recession fears, oil dropped more than 1.6% and copper, often considered one of the best barometers of future economic activity, fell 1.8% to its lowest level in a year.
The markets are screaming “double-dip recession!” and the Fed is whispering “You may be right… and there’s not much we can do to help.”
While the Fed should be honest in its assessment of the economic situation — with the new sentence representing such honesty — it should not pour fuel on the recession fire with overtly desperate measures. As long as we have a Fed, its most important asset is the confidence of the people and the markets. Actions like Operation Twist, which smack of “we’re out of ideas and out of influence,” do long-lasting damage to that confidence.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online