Credit Loan Deals

The flooding in the midwest has flooded over 1 million acres of farmland.  While this will raise prices for corn and soybeans that will help farmers not in the flooded areas, it will increase feed prices for cows, pigs, and chickens, further raising prices for beef, pork, milk, chicken, and eggs.  The increased prices will continue to increase inflation which is going to give the Fed Chairmen more issues as they will have to debate keeping interest rates low to try and help increase the economy or increasing interest rates to try and fight off inflation which is being fueled by the low dollar, high oil prices, and high corn prices.

Fed meeting minutes show that their slashing of the key interest rates last month was due to their worries about a severe recession.  With the economic downturn, crash of the housing bubble, and credit markets being the tightest they have been in a long time, the Fed is looking at a perfect storm of issues that could make this a prolonged recession.  On the other hand with the high oil prices and food prices, it is making it difficult to lower the interest rates any further to fight the recession as a continued drop will only be more inflationary.