This needs a little amplification. Our Federal Reserve Chief is being called on the carpet as a rampant enabler for debt addicts. The end will inevitably come, and according to Marc Faber, it won’t be pretty. From the International Herald Tribune:
The U.S. Federal Reserve Board acted “like a bartender” in lowering interest rates and its actions are contributing to a stock market bubble in the U.S., Marc Faber, the Hong Kong-based publisher of The Gloom, Boom & Doom Report, said.
“Each time you bail out, it becomes bigger and bigger, and the credit problems become much, much larger,” said Faber, managing director of Marc Faber Ltd. The Fed “feeds its customers with booze, and when they get totally drunk and are about to fall off their chairs, the bartender gives them more booze to keep them going. One day, it will lead to the ultimate breakdown.”
The Standard & Poor’s 500 index has risen 2.9 percent since the Fed cut its benchmark rate by half a percentage point on Sept. 18 to keep credit market losses from spurring a recession. Faber said the action spared U.S. financial companies like Citigroup from the consequences of bad lending decisions. [full text]