Gentle Ben

Years ago, Clint Howard (brother of director and actor, Ron Howard), was the child star of a show called “Gentle Ben”, which featured a big black bear named, “Ben”.

Gentle Ben always seemed to do the right thing, rescuing the little rascal and his friends whenever they got into a pickle.

Today, another Ben seemed to do the right thing by leaving the Fed funds rate unchanged. In the spirit of averting a major meltdown, “Gentle Ben”, aka “the Bearded Wonder”, acted in line with expectations. And for good reason…

At this point, any sign or introduction of a tightening monetary policy would be a serious error, worthy of water-boarding. The long-term health of our economy is at stake. Rising interest rates would quicken the deflationary pace of the housing market, thus causing bankers to throw up their hands and cry, “uncle!”.

Then, forced sales of assets that “they aren’t making anymore of” would occur, thus making matters even worse.

People, write this down: credit contractions are inherently deflationary. Therefore, any obsession with inflationary risk must be taken with a five-pound block of salt.

An extended or prolonged cycle of the current credit crisis, spawns a very serious threat to the equity markets.

WIP (Working in process)……….