If you have not been following upheaval in the markets, the Federal Reserve lowered the interest rate it charges to banks today from 6.25% to 5.75%. This rate is the rate that the Federal Reserve bank lends to banks. This was cut in order to add more liquidity to the system. The Fed acknowledged for the first time today that an extraordinary policy shift is needed to contain the sub prime-mortgage collapse that has been devastating the world’s financial markets. The fact is that the Fed is now less concerned less with inflation and more with economic growth. It also implies that the Fed will cut rates at the next meeting. This massive injection of liquidity will cause inflation will continue to reap its ugly head. Be sure to have some gold.
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