My way of fighting the fed, I cannot sit still anymore

[nyxtrader]

Quote from Landis82:

Yeah.

Let's raise rates back up to 6% so we can send the entire U.S. economy into a full-fledged Depression just so that commodity prices like oil ( which has a global supply/demand equation ) can correct.

That makes a lot of sense.

If you pay attention to anything...there is plenty of supply, there needs to be a correction in the dollar. As you can see from today's oil number there was a large build, if I am not mistaken.

There is alternative fueling available and we need to start the process.

I really don't believe increasing rates will send us into a large depression. It will hurt Wall street the most, however we will be able to put money back into the pockets of the American people. Most of the people on here believe rate cuts would save the world and of course there will be a ton of pikers saying that statement is not true.

This is basic econ and I believe most of the people on here don't understand it. For those that do, I hope you can educate the rest. That is not meant to be an insult just reality.

 

[Pa(b)st Prime]

Quote from Landis82:

Yeah.

Let's raise rates back up to 6% so we can send the entire U.S. economy into a full-fledged Depression just so that commodity prices like oil ( which has a global supply/demand equation ) can correct.

That makes a lot of sense.

Have these rate cuts helped asset prices? Credit spreads? Or the economy? Did those cuts help in 2001-2002?

Monetary policy is completely ineffectual in halting asset revaluation. If one thinks JNPR or Miami is going to be repriced by half then cost of carry is scant incentive to buy.

If the money center banks need a bailout (and Wag's I'll argue housing depreciation is only in the 3rd inning) then Congress should just form another Resolution Trust and be done with it. This policy of inflating a 9 trillion dollar debt is of dire consequence.

Look at this story today.

http://www.sun-sentinel.com/news/local/palmbeach/sfl-312vouchers,0,5039730.story

 

[Landis82]

Quote from PAPA ROACH:

Get real, what have these rate cuts done for you? NOTHING. Consumer credit rates have increased, and will continue to do so. Capitalism is designed to have cycles and cleanse itself out, in a Darwin type manner, survival of the fittest. The weak banks that over-extended themselves should fail, there are many that would rise to take their place. The EU is in a much stronger position currently and they have not cut rates. If you two are not smart enough to make money in a different environment, then find something else to do. Meanwhile the destr8uction of our country is underway via inflation. Good luck to you.

You still don't get it.
It's NOT about rate cuts!

If it was, the FED would have lowered FED FUNDS to below the yield on the 2-year Treasury Note by now. That's basic Econ. 101A which you obviously must have missed.

Moreover, yesterday's action by the FED also has nothing to do with rate cuts, doesn't it? It's about replacing bad collateral with good collateral so that credit creation can get going again. That is the basis for economic growth.

 

[neophytenate]

Needs editing. Good sentiment, but cut out the emotional phrasing. Write plainly, firmly and intelligently.

Calling his benefactors thieves will get you nowhere. Pleading also gets you nowhere.

For example: (the letter could be improved further)

****************************************************

I write to you today to discuss my concern about the state of our economy. The United States seems to be changing from a great economic superpower to a third-world socialist state.

Alan Greenspan spent many years trying to manipulate the economy and avoid the natural economic cycle. Before his departure, he reduced rates and held them at low levels for far too long, thus creating the major liquidity crises that we are currently battling.

Ben Bernanke has decided to take our hard earned money and bail out the credit industry. These continued rate cuts are clearly causing harm to America in the form of run-away inflation that we are all paying dearly for. The pace of inflation is outrunning income and is a much larger threat for a systemic meltdown of the economy. We will have a stronger economy, in the long run, by letting the market cleanse itself in the way that capitalism is designed for.

I applaude Jean-Claude Trichet of the EU, for sticking with the mandate of price control, and choosing to battle inflation. The FED has clearly lost its way, and is threatening our future and my children's future.

I ask that you and your peers take action and demand that the FED return to mandate of fighting inflation. There is a FOMC meeting next week, where the rates will likely be cut further. Thiese rate cuts are not helping Americans in any way. Further weakening of the U.S. dollar will only weaken our country in the long run.

As I write this letter, Oil is trading over $110 per barrel, wheat over $13, and the list goes on and on. Gasoline stockpiles in the US are currently at the highest levels in over 15 years, yet we are paying over $3 at the pump. Thiere are now ample supplies of gasoline. Bottom line, this is a problem of the dollar the the FED is destroying, not a true supply/demand imbalance.

Please use your influence to stop further rate cuts.

Sincerely,

 

[Landis82]

Quote from neophytenate:

As I write this letter, Oil is trading over $110 per barrel, wheat over $13, and the list goes on and on. Gasoline stockpiles in the US are currently at the highest levels in over 15 years, yet we are paying over $3 at the pump. Thiere are now ample supplies of gasoline. Bottom line, this is a problem of the dollar the the FED is destroying, not a true supply/demand imbalance.

Please use your influence to stop further rate cuts.

Naaaaaaaa.

There's no supply/demand imbalance with wheat. It has nothing to do with last year's horrible crop and people switching out of acreage to plant corn for the ethanol subsidy and the fact that inventory levels are at 5 DECADE lows!

Naaaaaa, that's not it.

 

[Aaron Copland]

Quote from Landis82:

You still don't get it.
It's NOT about rate cuts!

If it was, the FED would have lowered FED FUNDS to below the yield on the 2-year Treasury Note by now. That's basic Econ. 101A which you obviously must have missed.

Moreover, yesterday's action by the FED also has nothing to do with rate cuts, doesn't it? It's about replacing bad collateral with good collateral so that credit creation can get going again. That is the basis for economic growth.

Credit creation is basis for growth hum. I thought it was jobs, Landis get off the kool-aid.

 

[nyxtrader]

Quote from neophytenate:

Needs editing. Good sentiment, but cut out the emotional phrasing. Write plainly, firmly and intelligently.

Calling his benefactors thieves will get you nowhere. Pleading also gets you nowhere.

For example: (the letter could be improved further)

I agree with you to a degree. However emotion is needed as well. Emotions shows compassion, you don't want to sound like a bot.

As far as the name calling...call a spade a spade..

 

[Landis82]

Quote from Aaron Copland:

Credit creation is basis for growth hum. I thought it was jobs, Landis get off the kool-aid.

Economic growth = Job Growth

Or is the above equation too difficult for you to understand?

You must be even more ignorant than I first thought . . . and all this coming from someone that asked yesterday if the FED has the ability to put a price "cap" on crude oil.

I should have known better.

 

[makloda]

Quote from Aaron Copland:
Credit creation is basis for growth hum. I thought it was jobs, Landis get off the kool-aid.

I thought it couldn't get worse here on the forum. Landis is right, you're wrong. You won't have job growth without a functioning banking system. Credit is the lubricant that keeps a nation's economy running. No credit no growth simple as that. Banking system goes into melt-down so does employment and the entire economy.

 

[plugger]

Landis is right. None of these actions have anything to do with a bailout. It has everything to do with an ORDERLY UNWINDING. No one said the investment banks won't be allowed to fail. No one said that banks won't be allowed to fail.

But what we need to avoid is a large scale crash in the banking system. We need to give the system time to allow the markets to clear in an orderly manner. It does no one any good to see a widescale crash. Everyone is at risk. Right now corporations like Abitibi Bowater may be forced into bankruptcy for the simple fact that their access to credit has been cut off. This is only one example.

You guys who keep spouting about inflation need to think about the facts. Stop parroting what you read, do your own research.