Should Fed Cut The Key Rate To Zero?

Yesterday CNBC had a short talk on this question:

"Should Fed Cut The Key Rate To Zero"

Even more amazing is a so-called "expert" actually say yes!!!

Now clearly he missed his Economic classes and don't know what's interest rate and it's effect to the macro economy.

Well, even the famous Albert Einstein knew some economics and said this:

"compound interest is the most powerful thing in the universe"

HOW CAN INTEREST RATE CUT TO ZERO IS GOOD?

If interest rate cut to zero, central bank will lose control to the monetary policy. Imagine if you can borrow money without interest, you will borrow as much as you can.

Banks will do the same. They will borrow more than what they need and spend it on other toxic commercial paper or loan it to everybody else with or without a job.

The problem is we already know it is the bad solution since the credit bubble and sub prime problem started by banks gave loan to unqualified people.

No advance country in this world have lower the interest rate to zero because it is not a solution to save the economy, it is the poison that will kill it once and for all.

Ben Bernanke, Henry Paulson and other fed/treasury department officials tend to forget the cause of this credit bubble: too much money in the economy and interest rate is too low(2003-2006). Now they wanna solve the problem by using the same method that created this problem? Give me a break.

Besides that, imagine what zero interest rate will impact the inflation rate. I heard a fool on Bloomberg saying he willing to give up some to inflation rate in order to save the economy. Well, the zero-interest-rate method will never save the economy and clearly, this person doesn't know about interest rate and its crazy effect to the inflation. Inflation rate will shoot the moon if we do that. Dollar will fall through the ground because there will not be any carry trade and money supply is so much that you can simply pick up money off the ground!

Like Jim Rogers and every smart economist said: US is doom!