Casey Research: Fed already has cut main rate by third of a percent

Section:

1a ET Wednesday, September 12, 2007

Dear Friend of GATA and Gold:

Casey Research economist Bud Conrad reports that for a month already through its daily bond market operations the Federal Reserve has effectively reduced the Fed Funds interest rate by about a third of a percentage point below the Fed's nominal "target" rate of 5.25 percent.

"Watch what the Fed does, and not what they say," Conrad cautions. "While talking about holding the line against inflation, they have already gone ahead and made a cut in the Fed Funds rate. It is our opinion that their rate cutting has only begun. ... Investors need to understand that further cuts in the Fed Funds rate, which effectively bail out the bankers by injecting money into the system, risk triggering an exodus from the dollar and causing a knock-on currency crisis. That is the scenario investors want to be preparing for."

You can find Conrad's report at the Casey Research site here:

http://www.caseyresearch.com/pdfs/110907StealthRateCut.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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