Federal Reserve and Monetary Policy: The Inflationary Spike

Wall Street’s my-optic view about Libor Rates is a bunch of drivel. Once commodities traders figure out countries that subside their commodities, like China and India, has placed a floor in prices they will rush in (the trend becomes your friend) because there is no other place to put their “Carry Trade“ money. These two counties can spark another commidy boom because the percent change of their populations’ usage of commidies represents a very large change in physical commodities needed. Another reason is that there are commidies shortages in China. Example; is there is a shortage of Diesel fuel in China. This implies there will be a floor in crude. Traders will figure this out and begin another run on commidies irrespective of the demand discruction in countries like the US of A and Euro-zone.

The Federal Reserve does not mandate the use of Libor. Libor is just a financial service provided to those who do not want to deal with currency fluctuation. If Wall Street wanted a lower “Libor” rate then one of those rich Petro countries can recycle their Petro-dollars (or China can become a “Real Capitalist” country) and set up a competing service.

This global recession is going to be longer and deeper than the bunch of Fascist on Wall Street, Washington DC and the Beltway Boys think. Mark to Market is not the problem; it’s the accounting fraud that took place in the GSEs Fannie and Freddie. Their fraudulent behavior changed Lenders and Borrowers behavior.

Viva La Revolucion!!!!!