The Economy

This morning's housing starts data was expected to show a slight gain, but the report said housing starts declined 10.6% in October.

Monday Fed Chairman Bernanke offered many very sobering comments about economic prospects in the years ahead, yet financial traders chose to focus on only one thing...that interest rates would remain low and the Fed wasn't at this time concerned about the effects of the "carry trade" and its upward push on commodity prices.

Throughout rising unemployment and reduced consumer spending, stock markets have continued their climb on speculative fever that the US Dollar will weaken further.

After the Fed admitted that its own stance of keeping interest rates too low for too long helped to fuel the bubble that eventually burst into a financial meltdown, does the Fed really want to keep interest rates low in a manner that tells the speculative community it is okay to proceed with destroying the dollar?

If you remove the "dollar demise" effect on commodity prices and instead look at economic demand contraction signals, wouldn't we be dealing with deflation?

Rather than feeling better about the US economic outlook, this all feels to me that we are setting ourselves up for an even bigger disaster.

Shouldn't the Fed raise interest rates enough to avoid another bubble and the inevitable burst?