Cheap Money

The US Federal Reserve announced its plans to hold interest rates at zero to .25% for the next three years, although several board members argued for a rise this year and a near majority of the members suggested an increase for 2013. The Federal Reserve claimed inflation is running at 2% and on which planet are these financial wizards living. Prices on essential have rocketed the past few years without any salvation from wages. A dollar buys less and less, so consumers buy less and manufacturers produce less to guarantee demand will not cheapen their products, thereby cutting into profits. The stock market rallied upon hearing the news. Wall Street loves cheap money, for what is good for Wall Street is good for Wall Street alone. And they are way less than 1%.