From the people who gave us the subprime mortgage mess, ADVICE?

The Federal Reserve is under extreme pressure from the wall street wizards to lower the interest rate to 3% or less. The wizards have gotten themselves, the US, and most of the world economies into a sub-prime mortgage meltdown and now they want the Fed to throw them a rope. The rope, lowering interest rates, is tied directly to printing money which exacerbates inflation by pouring more money into an already inflationary economy.

No one wants a recession, but the US has had many recessions over the years and they do have a useful purpose. They tend to wring out economic excesses that build up over time. They use to occur about every three to four years as a part of the normal economic business cycle. We have now gone approximately seven years without out a recession and just like with earthquakes the longer between quakes the stronger the jolt.

Let's not follow the short sighted advice of the Wizards. Let's hold the interest rate steady. Let's not fan the fires of inflation as a temporary solution to the sub-prime mortgage mess.

What was the Fed thinking?

You wonder what the Fed was thinking with this recent 1/2 point rate reduction. If their primary goal is to control inflation, they must feel it is under control then I guess the powers that be in the Fed have not personally been in a grocery store or bought gas recently.

I know they say we have to exclude "volatile food and energy" sectors from the inflation equation, but that is like not noticing the elephant in your living room. Both food and energy impact inflation pressure and price rises filter through the whole economy. e.g. Food transportation costs rise with gas prices so food price increase. Also, the rest of the world is buying more agricultural products so even with farm production methods improving, the demand is greater than the supply and food prices rise again.

Reducing the discount rate only adds to inflationary pressure and will make the Feds job harder, down the road. Remember the 12 percent plus inflation rates of the '80's? Also, those citizens who depend on money market savings accounts will have their income reduced and spend less, further restricting demand.

Their whole purpose for this reduction is to prop up the financial industry's losses and helping those institutions which caused the mortgage meltdown by providing loans based on thin air to begin with. How sad!