They're Cutting Too FAST !

LNR already weeks ago, warned that the Feds should not cut rates so much, so fast. Keeping liquidity yes, but LNR warned not to repeat the Bank of Japan’s mistakes in the late 1980’s of cutting the discount rate too much too fast, lest it gave away its most powerful weapon to fight recession. The Fed discount rate will soon be 0.5% leaving little room to fall further. In several articles, LNR has counseled the rapid and massive creation of jobs as a natural factor in reviving the economy with minimal inflation and long term benefits. Throwing “trillions” of dollars into the economy in the form of cheap credit will NOT give short, medium OR long term growth, it will only result in inflation. Employment offers a whole set of benefits that filter through the economy naturally and creates stable long term growth as well as stemming the current downward spiral.

Obama is working on creating 2.5 million jobs, he’s wrong, we’re looking at a need to create 5-7 million new jobs over the next two years to have the desired effects.