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Martin D. Weiss Ph. D. Takes a Closer Look at the Feds Interest Rate...



Martin D. Weiss, Ph. D. takes a closer look at the interest rate cut on January 30 and the correlation between that and the Dow. Dr. Weiss examines the impact that the Fed rate cuts are having on the U.S. economy.



Bernanke's half-point rate cut on January 30 initially gave the stock market a quick shot in the arm. But then the Dow turned right around and ended the day down 37 points.



Most investors know what's going on in their own neighborhoods. They see the handwriting on the wall in the headlines. And they realize Bernanke's caught between a rock and a hard place.



The morning of January 30, the government shocked Wall Street with the news that:


Home construction plunged 24% in the fourth quarter, the worst since 1981. The economy sputtered to a virtual standstill in the fourth quarter, crawling at the anemic pace of just 0.6% per year. For the entire year, GDP growth was the worst since 2002 when the economy was suffering from the aftermath of 9-11, a tech wreck and a wave of scandal-ridden corporate bankruptcies all at the same time.



Resurging inflation only gets worse as the Fed cuts rates and pumps more money. The facts:



-    Gold is on fire, surging another $7.


-    The U.S. Dollar Index is down 75 basis points on the January 30 Fed rate cut alone.


-    In November, the most dramatic surge was seen in wholesale prices in 22 years.


-    Import prices surged by a staggering 10.9%, signaling much higher inflation ahead.


-    And we learned the Fed's favorite inflation gauge jumped more quickly in the fourth quarter than virtually anyone expected.



"This is serious. It means that long before the Fed's rate cuts begin to have the desired impact on the economy, they're already beginning to backfire with more inflation. Smart investors see this. That's why they sold into today's stock market rally," Dr. Weiss states.




To read this issue online, please visit:


http://www.moneyandmarkets.com/Issues.aspxRate-cut-bombs-Fed-between-rock-and-a-hard-place-3



About MARTIN D. WEISS & MONEY AND MARKETS     



Martin D. Weiss, Ph.D., founder and president of Weiss Research, Inc. and a leading advocate for investor safety, is a nationally recognized expert on domestic and international financial markets. With more than 35 years of experience, including many years in Latin America and Asia, Dr. Weiss has helped empower millions of investors to make better financial decisions through his monthly Safe Money Report and daily Money and Markets.



Dr. Weiss' keen understanding of foreign markets and the global economy has earned him a reputation for thoughtful, in-depth analysis that investors can rely upon to make informed financial decisions. Regularly called upon by the media for his independent investing guidance, he has been featured in publications nationwide, including The Wall Street Journal, The New York Times, Chicago Tribune, Investor's Business Daily, and Forbes and has also appeared on CNN and CNBC.



Throughout his career, Dr. Weiss has been an advocate for consumers and investors in the insurance, banking and brokerage industries, dedicating his time and resources providing analysis and data for Congressional testimony, constructive proposals for reforms in the securities industry and legislation for full financial disclosure as well sound accounting and fiscal policy. In November 2004, he launched the Sound Dollar Committee, a nonprofit organization dedicated to building a network of investors seeking to protect the nation's future by demanding honesty in government accounting, a balanced budget and sound economic policy.



Dr. Weiss is author of The New York Times best-seller, The Ultimate Safe Money Guide, which gave baby boomers a road map to grow their wealth safely. It was listed on the New York Times Business, Wall Street Journal, and BusinessWeek best-seller lists, as well as the Barron's Roundup for 2002.



Dr. Weiss holds a bachelor's degree from New York University, a Ph.D. from Columbia University and is fluent in eight European and Asian languages.




Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.






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