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Robert M. Liu

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A Simple Quick Fix for the Crisis
By Robert M. Liu   
Rated "G" by the Author.
Last edited: Thursday, October 09, 2008
Posted: Thursday, October 09, 2008

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Fed Chairman Bernanke has created a terrible market psychology. If he stays the Republican Party could lose the shirt on its back come November.

A Simple Quick Fix for the Crisis

-- by Robert M. Liu

The economy has tanked. The stock market has crashed. The U.S. dollar has been trashed. The price of gold has jumped over US$900 per ounce. Global investors’ confidence in the Federal Reserve has vaporized. The credibility of the U.S. government has plummeted. And one can see no light at the end of tunnel.

But I believe there is a simple, quick fix for the crisis. That is to fire Fed Chairman Bernanke or make him go away, and then invite Paul Volcker back to the Federal Reserve as its chairman. This would give the market a signal that the administration’s strong dollar policy is for real. Once investors' confidence in the U.S. dollar is restored, everything else will fall into place. Dollar-denominated assets including U.S. stocks will rebound.

Paul Volcker as Fed Chairman would symbolize America’s determination to fight inflation and maintain the value of the dollar. The world watched him succeed in curbing inflation more than two decades ago. His return would immediately reverse the current negative market psychology.

Financial markets are about psychology. Bernanke has created a terrible market psychology. His face is the symbol of market misery. The world has lost confidence in this man. Why should the Bush administration hold on to this man? The appointment of Bernanke has been the Administration's fatal mistake. Make Bernanke go away, or the Republican Party will lose everything come November. It wouldn’t even be able to keep the shirt on its back. Make Bernanke resign before it’s too late, Mr. President. I beg you!

Oct. 9, 2008

Web Site: A Simple Quick Fix for the Crisis

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Books by
Robert M. Liu

A Guide to Chinese Affairs

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Shanghai Escapist

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FREE DOWNLOAD Cyclopedia of Economics by Sam Vaknin

Cyclopedia of issues in economics analyzed through the prism of the economies of countries in transition, emerging markets, and developing countries. ..  
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