It is currently 17 Oct 2017, 15:37

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Bernanke cuts another 50 basis points

Author Message
Senior Manager
Joined: 30 Jul 2007
Posts: 385

Kudos [?]: 59 [0], given: 5

Location: Europe
Schools: St. Gallen '09
Bernanke cuts another 50 basis points [#permalink]

### Show Tags

30 Jan 2008, 13:15
and Gold answers with another new all-time high at 942.20 on the day (APR contract).

And, we're going much higher from here.

But, not necessarily in a straight line.

The liquidity hatch has been opened, and the FED is now fueling inflation and weakening the dollar with their rate cut. And, they have left the door open to further rate cuts.

Kudos [?]: 59 [0], given: 5

Senior Manager
Joined: 30 Jul 2007
Posts: 385

Kudos [?]: 59 [0], given: 5

Location: Europe
Schools: St. Gallen '09
Re: Bernanke cuts another 50 basis points [#permalink]

### Show Tags

30 Jan 2008, 14:24
and the markets close RED!!!

looks like a true bear market

Kudos [?]: 59 [0], given: 5

CEO
Joined: 15 Aug 2003
Posts: 3454

Kudos [?]: 918 [0], given: 781

Re: Bernanke cuts another 50 basis points [#permalink]

### Show Tags

30 Jan 2008, 19:58
I wonder if there is a study of whether the Feds interest rate cuts affect real economic factors such as GDP.

I don't know if the stock market is a strong reflection of the economy anymore - A lot of companies have become multinationals and often generate a significant proportion of their revenues overseas, others are accepting money from sovereign wealth funds and are flush with cash -- it is difficult to say where the economy is headed.

Kudos [?]: 918 [0], given: 781

Senior Manager
Joined: 30 Jul 2007
Posts: 385

Kudos [?]: 59 [0], given: 5

Location: Europe
Schools: St. Gallen '09
Re: Bernanke cuts another 50 basis points [#permalink]

### Show Tags

31 Jan 2008, 04:16
Praetorian wrote:
I wonder if there is a study of whether the Feds interest rate cuts affect real economic factors such as GDP.

I don't know if the stock market is a strong reflection of the economy anymore - A lot of companies have become multinationals and often generate a significant proportion of their revenues overseas, others are accepting money from sovereign wealth funds and are flush with cash -- it is difficult to say where the economy is headed.

In theory, interest rate cuts should spur increased borrowing and investment. And because of the multiplier effect, this should then positively influence GDP based on the increased spending and investment. However, America is no longer the traditional economy that it once was, because it is now a service-oriented one with 70% consisting of consumer spending. Where will the additional borrowing and investment go? Pay off debts?!

And like you said, many of the big companies with the big pockets derive profits from and invest heavily overseas. IMO, we are in the process of a major shift in the international economic and financial system from the West to the East. China will probably become the largest economy before the end of this century. What products does America actually produce besides airplanes, military weapons, and federal reserve notes? OK, I'm being slightly facetious.

Kudos [?]: 59 [0], given: 5

Re: Bernanke cuts another 50 basis points   [#permalink] 31 Jan 2008, 04:16
Display posts from previous: Sort by