Federal Reserve and Monetary Policy: The Nazi War Machine

In a speech dominated by the tragedy of Sept. 11, Vice President Dick Cheney told graduating cadets at the Air Force Academy on Wednesday that they will help lead the nation to victory in the war against "freedom's enemies”.

Notice the change in ideology. We went from “leading the nation to victory in the war against terrorist to "freedom's enemies”. In other words, be prepare for the following unilateral actions taken by Bush. No troop withdraw from Iraq and Afghanistan. Don't be surprise if US tanks move into Iran and/or Syria. Look for a military build up in South Korea. What ever happened to reaching out to the rest of the “freedom loving countries” and getting some help?

BushCo. wants CAFTA to pass so that they can remove a large chunk of foreign aid from the US government budget. BushCo is using fast track authority to remove the production of consumer items from the US economy and replace the production of those items with guns and bullets. In other words, no President Johnson's “Guns and Butter” society.

Price stability is going to be hard to maintain once our trading partners find out that BushCo. is not interested in diplomatic solutions for Iran and North Korea. It will be a fight between the US current account deficit and the slow down in the global economy. Throw in a mixture of geo-political risk and poof, dollar volatility!!!!

Price stability is also going to be hard to maintain after the statement of Dallas's Fed President Fisher saying that the Fed is in the 8th inning with respect to interest rates tightening. In other words, the FMOC members are hoping that recent dollar strength will translate into lower import prices and corporate profits grow due to lower cost and/or increases in the top line.

It was always my opinion that Greenspan's foray into political topics has placed the Fed in a difficult position. Fisher's interview has confirmed this opinion. He said that the Federal Reserve does not understand the dynamics of today's economy. If the fed has no ideal want is going on, then how is in the best interest of the citizens of the US that Greenspan can endorse permanent tax cuts, SS and other fiscal items?