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The Federal Reserve Boards reduction in the rate can be best categorized under the heading "Desperate Measures." The government is on the hook for so much money it guaranteed to banks, and banks will fail without those guarantees.

One thing history has proved is when you have "government and banks" on one side of an equation, and "good for consumers" on the other side of the equation, there will not be an "equals sign" twixt the two.

THE REASON FOR THE RATE CUT

The cut in the rate is for banks to use to assist troubled debtors to prevent the already record numbers of foreclosures from rising further. Bernanke's plan, however, also includes raising the amount the government will guaranty on a home loan, and increasing liquidity in the monetary fund. "Increased liquidity" is, apparently, the government's new term for "inflation."

John Maynard Keynes said, "By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." We are about to witness this come true, and it will hit Americans where they do have their savings: in their retirements.

Most people think of inflation as "rising prices." That is one of the effects, but inflation truly is printing money. As more and more dollars hit the market, each becomes worth less. It takes more dollars to buy the same item. It was not that the item went up in value, but because the dollar went down in value.

CHANGING THE SIGN

While the cut in rate will not be good for consumers as a whole, individuals who recognize how this all works will be able to make a difference for themselves. The people who will most benefit from the combination in Bernanke's plan are those who have homes and credit card debt, and those who are in a position to buy homes.

Those who are struggling to meet credit card payments and mortgage payments will benefit PROVIDED they do not accrue more useless debt, and, as dollars inflate, use the inflated money to pay off their homes. Those who cannot remain disciplined are better off to use the inflated dollars to pay credit card debt as short-term debt. In either case, it is time to budget income to repay debt, and to not accumulate debt on credit cards.

There will be opportunities for home purchases with favorable terms. If you have not purchased a home yet, there already are some opportunities to pick up some equity through the foreclosure market. You must be wary of variable rates, however, as the

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