Sept. 28, 2007 (LPAC)--The Federal Reserve lowers the federal funds interest rate by a half a percent on Sept. 18, and what happens to mortgage rates? They rise. Freddie Mac reported on Sept. 27 that the average rate for 30 year fixed mortgages had risen for the second week in a row, to 6.42%, while the same thing happened to 15-year year fixed rate mortgages, which now average 6.06%.

This is exactly the kind of phenomenon which Lyndon LaRouche was pointing to when he warned, hours before Bernanke's Federal Reserve lowered the federal funds rate, that the only thing stupider than raising interest rates, would be to lower them. Monetarist theory does not work at a time like this, LaRouche said. "The only thing that can be done is the firewall. There is only one answer: freeze the worthless paper."