Short-Term Interest Rates Should Never be Below 2.5 %

This is a late post today, 1:30 PM CDT.  We didn’t feel there was a big need to say what was going to happen at the Fed meeting for a number of reasons:

1) Daffy Duck is still in charge of the FED..

2) The press release said that they were going to keep doing the same thing even though it is not working..

3) They did not acknowledge a fundamental fact, that there are two groups involved in the revolving money scene, savers, and borrowers…

4) They did not acknowledge, or maybe don’t know what is the real effects of interest rates.  I traded through the 20 percent interest rate period in the early 80’s and will never forget what an old trader said to me then, this is good, people doing stupid things will be broke in 5 years as they will send 100 % of their capital towards interest. 

5) Now I am an old trader and here is what I have to say, one percent interest rates allow people to do stupid things for a 100 years before they go broke.