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Forexmentor.com Forex Trading Price Action

U.S. retail sales closed out 2007 on a down note. That, combined with the housing and credit crises and other factors like the larger-than-expected loss at Citigroup, has people uttering the R word. Farm and factory prices also dipped in December, possibly signaling economic contraction in the works.

Bernanke has indicated that the U.S. central bank is primed to take “substantive additional action to fuel growth.” Washington appears to be out of policy levers, spending being its only option.

Add further rate cuts into the mix, and you have a recipe for runaway inflation and high employment like the 70s. The last thing we need is more consumer spending (read, credit card debt). The problem lies not with the consumer, but with the economy not producing enough.

–Peter
forexmentor.com

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