Credit Spreads Ignore Cash Infusion

Finally, it seems, real markets in a panic are beginning to notice that artificial interest rate "targets" are too low to compensate for risks and inflation.

Imagine how much better off we (you) would be if Fed funds had been at 5% for all of the last seven years, your CDs had been paying 6%, your stock market was "reasonably" priced (instead of convoluting in bubbles of sector rotation) and mortgages had never been under 8%. Your dollar would not have inflated, as it did.

of 12:33PM September 18, 2008