Times UK:Challenge for Bush as rates rise

[Iceburg]

http://business.timesonline.co.uk/article/0,,8209-1273980,00.html

ALAN GREENSPAN pressed ahead with a further rise in American interest rates last night despite the closeness of the US presidential election in only six weeks’ time.
....
With so little time left until Americans go to the polls on November 2, President Bush’s strategists will inevitably be edgy over how the rise in rates will be taken by voters at a time when America’s economic “feel-good factor” remains vulnerable.

The last time that US rates were raised so close to polling was in 1980, when steep increases in October were followed by President Carter being ousted from the White House. But most analysts expect that the Fed’s move will be seen as a vote of confidence in the recovery and bolster the Bush campaign.

A decision by the Fed to sit on its hands after trailing a move would have been seized upon by Senator John Kerry, the Democratic challenger, as a sign that Mr Greenspan was worried. Ian Shepherdson, of High Frequency Economics, said. “Given Greenspan stuck his head above the parapet two weeks ago, I would have been astounded if he had not raised rates.”

[cliss]

1. "a vote of confidence"....

I wonder. This move could be interpreted either way. The fact that the Fed raised interest rates so soon before the election might not be politically motivated. But then again, it might.

It's hard to tell with Alan Pondscum. I know that when this corrupt administration got up and running, Alan urged O'Neil to take the position as Sec. of the treasury because he was worried about the way the winds were blowing. He felt that O'Neil "could make a difference".

So Greenslime must have known who these guys are. On the other hand, I've seen him cave to the pressure. He's lied before business groups to try to paint a rosy picture: "yes, the economy is doing great. The consumer is not burdened with excessive debt".

So this move is really hard to read.

[Bandit]

2. You don't raise interest rates without a reason

What is the reason given by Greenspan? The Economy is doing wonderfully and that is why we must make people pay more. Doesn't make sense. unless the economy is so strong that it needs slowing down (which I could never understand) then the only reason to raise rates is because of debt. The US is going to have to pay more interest on the debt and we already pay more interest than we spend on National Defense. Pretty soon the interest on the debt will eat up the entire budget with nothing left for social programs but that is exactly what the GOP likes. The people making the money off the interest are the ones supporting the GOP. It is all part of the plan and as soon as Kerry assumes office the rates will begin escalation and Kerry will get the blame. The first thing Kerry must do is can Greenspan and put Rubin in his place. Greenspan is extremely partison.

[othermeans]

3. He is afraid inflation might take over

Inflation is caused by too much money being in circulation and with that happening prices begin to rise and a spiral begins. Germany after the end of WWI is given as an example of this. More recent examples are places like Argentina and Colombia.