The Fed needs to start raising rates!

Discussion in 'Economics' started by Kicking, Sep 30, 2009.

  1. I don't have the fixing, obviously... However, I do see that it appears to be trading at arnd 13bps at the moment. As far as I can see, it traded between 8 and 15 bps all day.
     
    #51     Oct 1, 2009
  2. freeze83

    freeze83

    #52     Oct 1, 2009
  3. Man, I am just waiting for the fed-sters to do that
    y'all know what happens every time they do
    lol
     
    #53     Oct 1, 2009
  4. achilles28

    achilles28

    ^This is right.

    75% of GDP is consumption.

    Consumer debt is at record highs. Consumer equity (home and investment), at major lows. The rapid asset appreciation of the 90's was more an explosion of consumer credit (and Government debt), than anything else. Juxtaposed to the easy-money 90's and 00's, America over-consumed (bought more than it earned) and ran-up personal debt to maximum levels. Now spenders must under-consume (spend less than they earn) to pay it back. How will effect GDP when consumers account for 75% of it? 14,000K DOW suddenly makes sense retrospect to 20% over-consumption and rampant market speculation..

    Then you've got insolvent Banks kept afloat by taxpayer money and opaque accounting standards. They're pulling credit left and right, so if the lights go out again, they won't be holding the bag. Not exactly the conditions needed to reflate the system, no?

    Debasing the dollar by 70% could lead to financial Armageddon, and is in no way a good idea.

    Besides the inherent problem of reflating a market in which a liquidity trap persists (bankers hoard cash), that magnitude of debasement would cause a dollar panic. A run on the currency is in no way bullish for anyone. Sure, the stock market goes wild. But in real terms, even asset holders lose. Savers and holders of cash get wiped out from run-away prices. That level of inflation destroys 20-50% of national income, overnight.

    Sadly, that level of debasement is in the best interests of Government and Bankers. Bankers need it to reopen markets for asset-backed securities. And Government has a pressing national debt and massive Entitlement commitment its got no way to pay off.

    That explains why so many high level US bureaucrats trashed-talked the dollars reserve status, as of late. The dollar is toast. They're going to implode it.

    The Asian tigers will respond by competitive devaluation. But for how long? When oil goes north of 120$, how long will pegged Countries take it up the ass before they throw in the towel? When it becomes obvious the situation is lose-lose, how many countries will go down with THAT ship?

    Conventional wisdom expects a competitive devaluation. IMO, its wishful thinking. OPEC members rarely honor quotas. Game theory predicts it. When it becomes more advantageous for one Country to buck the group, they do. When one Country can lose less by not devaluing its currency, it will. Bear in mind, this is politics. Do you honestly think the average Bloke in the UK will give a damn about US banks come voting time when HIS paycheck has been cut by 1/4 by run-away prices? HELL NO.

    America is done. It's a has-been Country. Not because we're a second-rate power. But because American Banksters have decreed it.

    What's even more unsettling: The coming Dollar Crash could have easily been avoided had the FED nationalized all toxic paper. Period. This could have been accomplished for a mere 1 Trillion dollars. Instead, we're at 7 Trillion staring down an impending Dollar collapse.

    Maybe someone can explain that.
     
    #54     Oct 2, 2009
  5. Looks like more people are getting on the banwagon of higher rates, you have to applaud Barron's for hopefully getting things moving finally. Perhaps the Fed will feel obliged to at least sound a little more hawkish. And btw, Stiglitz also said that the mantra of bubbles not being identifiable is horse shit.
    Anyway crude is taking off, who needs a PHd ? The problem with the world is really that incompetents are everywhere.
     
    #55     Oct 19, 2009
  6. Looks like an inverse hs in the 10 year rate. 6% and over?
     
    #56     Oct 19, 2009