US Federal Reserve must lower the interest rates rapidly now to halt free falling US economy from a total catastrophic collapse
Sam Adelton
Sep. 17, 2006

It seems like Japan in early nineties but in an accelerated mode. The biggest problem for the US economy as talked before is the real estate and heavy consumer debt. The Government debt is also a major problem as US economy rapidly shrinks.

The debt burden with refinancing loan by the middle-class Americans are so heavy that a catastrophic collapse is evident. As the economy collapses, the revenue will be lowered. The budget deficit will triple in no time. The Government will keep printing money and pay its debt. But common people in America will have serious problem in trying to pay the debt back.

The gold will rise in price, as dollar will lose its value along with all other currencies in the world. The high-energy price relative to other years will be another major problem as people have to drive.

US Federal reserve made catastrophic mistakes in reading only the inflation part of the stagflation infected US economy. Stagflation is always followed by deflation and major depressions.

US Federal Reserve raised rates for years gradually without understanding the stagnation part of the stagflation. Now they are repenting for their act. While their acts had little effect on inflation, their acts have plunged the US economy into a deep recession and probably into a major self-fueling depression.

Federal Reserve must act now! They should lower the interest rates rapidly to 2% and then eventually to zero percent just like in Japan. The Government must reduce the budget deficit now. It must take control of social security and Medicare funds now. It must do whatever is necessary to bring back trade surplus – not any more trade deficit.

Dollar has to made strong with positive balance of payments nor with hikes of interest rates. US should communicate to all other nation – be fair in trade or else we will close our markets for you.

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Sam Adelton
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