Video and Transcript of Semi Annual Monetary Policy Report

Hi all,

After watching the full meeting yesterday, here is my short conclusion:

Economy
Necessary counter-cyclical monetary policies has already been used to stabilize the US economy, and with the recent corrections in property prices, goods and services, most products in general, has already been adjusted to norm, where it is more affordable to common citizens in the US. Banks are also given credits for every good loans made to any credible borrower.

Seems like measures of increasing additional money supply to the economy, and measures to prime the banks to lend has taken place. But what may seem worrying for the moment, is only if other countries may not find the returns on treasuries and the USD is no longer attractive.

Future
With a little more to be done still, that means after 2 Trillion USD, the FED will allow market forces to adjust itself to these new changes, and hope that consumer's confidence could be restored over the next few months. FED will continue to monitor the progress of their capital injections, and will be looking at withdrawing out their investments in banks gradually.

I believe the twin deficits should soon be an important topic for next year, as the US government may have to deal with enhancing their credibility, and repayment of debts. At this moment, the smoke may seem to have cleared a little for the 'real' US economy, and many steps that has to be taken to revive the economy is already better defined. I begin to see some light from this financial turmoil.

Additional Notes
If you are a technical trader, 7,100 of DJIA will be a tough psychological level to break, as it is the 50% mark of the index. DJIA's closing low on 27 June 1932, was 42.93... and it's high on 9 Oct 2007 was at 14,164.53.. We have thus effectively retraced 50% within 1.1/2 years, from the entire 75 year move. Interesting isn't it?

If you have missed yesterday's semi annual monetary policy report by Fed Chairman Ben Bernanke, here are some links for you to watch the full video, and the report's transcript.

If you have views and comments that you would like to share, drop me a comment, or post in my forum

Cheers..