Wednesday, January 16, 2008

Fed: Economy Lost Momentum....

"The Federal Reserve's new snapshot of business conditions around the country, released Wednesday, suggested that the strains from a persistent housing slump and harder-to-get credit are affecting the behavior of individuals and businesses alike -- making them more cautious."

Our economic signals continue to point our economy towards a recession, if not worse. Last night (I hope that it was a dream), I heard a pundit on Fox or CNN (I switch back and forth) mention signals similar to 1929. Of course, that is very much an exaggeration, but isn't it just as much of a fairy tale to assume that no serious correction actions need to be put forth for our economy? Do we really believe that a short-term stimuli such as tax cuts, interest rate reductions, and/or spending measures will make a difference?

More trouble - the CPI rose .3% in December, which means that inflation concerns are rising - even with this being the case, the Fed will move forward with interest rate cuts to spur the economy. Doesn't anyone see that really serious measures need to be enacted.

My book, "An Easy Out" predicted this, and pointed to what America really needs - productivity and competitiveness. That's the only true solution.

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