Monetary Policy Easing, Federal Funds Facility points to future inflation

I was never more interested in economics until the macroeconomic class project changed my mind. My group was assigned to study the current monetary policy of our Fed. As the Instructor pointed out, there had been never a time in the past that have made the study of economics more exciting than now. We ... sadly agreed. Unparallel US financial challenges, increasing unemployment rate, subprime mortgage bust, credit crunch and trillions of national debt have pushed Chairman Bernanke to almost a corner. I feel sympathy that he has to inherited this problem from former chairman.

Did not ace the class, yet lessons have been very educational. Being a fan of bullet points, I observe:

1. Our Fed will print money to solve the first crisis - credit crunch
2. There will be more bankruptcies, but controlled.
3. sign of inflation? There are news about rising price in certain industries such as garbage, public transportation.
4. rising unemployment. more people around me are losing jobs...
5. new technology, namely green technology is needed to drive economy out of recession.
6. Ease of monetary policy is an innovative approach to solve credit crunch issue. It may set a stage for significant dollar depreciation. (see graphs)

Most of us have questioned why Fed bails out large banks such as Bank of America and Citibank. Fed does not have a choice, unfortunately. I learned that Great Depression of 1920s-30s and Japan growth recession of the 1990s' was a consequence of no bank bailout. People lost faith in the system then.

I read several articles, putting their opinion aside and looking at the facts. Our economic fundamentals should remain stable. Growth of GDP will be small, if any. My opinion about the stock market is more biased toward the bull of a bear market, but stock bottom has already been reached. I also notice George Soros talk much recently. He does not talk for nothing.. according to financial market history.

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