January 28, 2008 (LPAC)--The London Financial Times' widely-read Lex column this morning is a stern lecture to the U.S. Federal Reserve Board, in advance of its Jan. 30 meeting on interest rates. "Lex" instructs the Fed that a further half-percent rate cut would be a terrible mistake, "clearly not healthy." But, he says, the Fed must do it anyway. If not, it will bear the responsibility for a still bigger plunge in markets.
"Having made its bed, the Fed must lie in it," writes Lex. "Investors, with their unhealthy faith in the central bank's ability to solve problems, are betting on further largesse. Having reacted so aggressively to the market swoon, it would be bizarre only days later for the Fed itself to risk triggering a sell-off by failing to deliver."
LaRouche corrected "Lex" as follows. "They're wrong, on this thing specifically. Because, I'm not proposing that they simply go back, reverse, on high or low interest rates. I'm proposing a two-tier system, which enables the relevant agencies to exert some control over this damn process. Which is a completely different thing than simply raising or lowering interest rates.
"You want to raise the interest rates on all loose things," he continued, "but lower the interest rate to Roosevelt recovery levels, for certain benefits for the internal economy. Strict benefits. So you have a strict regulation, like a Roosevelt style, and people will find out that the price of money borrowed for loose purposes gets very expensive, whereas the money done for legitimate purposes gets much less expensive. Right now, it's the opposite way around, which is the problem."
