Week Sept 17 - 21

S&P 500: 1525

Bernanke surprised Wall Street with his 0.5% drop in interest rate. It looks like there will be a new round of rate cutting going on. I believe this move is too short term focus and will cost the Americans in the longer run. The Fed is trying to bail out people who didn't deserve to own a house at the expense of everyone else. This rate cut will not only affect the US, but also other countries which currency is pegged to USD. Because it seems like every country outside the US is doing great, it puts a lot of inflation pressure for countries that are pegged to USD. Saudi Arabia, for the first time, didn't follow US and cut rate because it is having a great inflation pressure already. If anything they should raise the rate not lower it. Maybe Bernanke's intent is to depreciate USD to make it more competitive in world trade I don't know. But I think it is a bad move.