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Fed Strategy: Spread Economic Pain Over Multiple Years

Posted Mar 19, 2009 02:45pm EDT by Tech Ticker
Related: ^dji, ^gspc, abx, aauk

The "Rambo" Fed yesterday announced it would inject $1 trillion more to aid the U.S. economy, including buying up to$300 billion worth of long-term Treasury securities over six months.The Fed's message: deflation is our number one enemy and our aim is to spread out the economic pain over several years, notes guest John Mauldin, president of Millennium Wave Advisors.

Of course there are risks to this scenario including dilution of the dollar's value, (Gold has rallied more than $60 an ounce since yesterday's Fed announcement amid declining confidence in the dollar.) and rising inflation. Can Bernanke and team beat deflationary pressures without risking hyper inflation? 

 

 

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