It was clear to the New York Investing meetup that the Fed had chosen to try to save the economy in the short-term, no matter what the cost to the U.S. dollar and no matter how much inflation resulted from their actions. At the meeting held the very evening of the rate cut, it was stated flatly that, "The Fed lowering interest rates will cause the U.S. dollar to drop further and inflation to get out of hand" and "Lower Fed rates mean higher gold and oil prices" going forward (see: http://investing.meetup.com/files). This was followed up by an impassioned plea to get out of the U.S. stock market, get out of the U.S. dollar, and get into gold and silver.
While the New York Investing meetup had little confidence in the Fed's ability to rescue the economy or hold up the stock market, it was convinced that the Fed's liquidity binge would be the death knell for the reserve currency status of the U.S. dollar (Please see our video about this, "Saving the Economy be Destroying the Dollar" at: http://www.youtube.com/watch?v=s9K1lSA9AHE). The long-term implications for inflation hedges such as gold, silver, oil and food commodities were obvious. Even though the Fed and many mainstream economists were worried about potential deflation from collapsing housing prices and the stalled bond market, New York Investing staked out a clear position that the falling dollar was highly inflationary (also denied by many mainstream economists) and that this was the important investment theme for well into the future.
Next: The Markets React to Helicopternomics and so does the New York Investing meetup
Organizer, New York Investing meetup
For more information about the New York Investing meetup, please go to: http://investing.meetup.com/21