what if the US dollar go over the hill then all of a sudden the price of every common amenities skyrocket, imagine if your income this month can only get you half of what you can purchased last month, then all US stocks will nosedive b/c its denominated in USD, then there be more rate cuts to try & "stimulate" the economy feeding into the whole cataclysm
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
the upcoming fed move .. Whatever happened to INFLATION?
- Thread starter scriabinop23
- Start date
Quote from The Kin2:
In other words, the Chinese economy is undiversified, and a trillion of dollars in goods has been exhanged for a rapidly depreciating asset: U.S. T Bills and Currency.
This is even better than Europeans buying Manhattan from the Indians.
China cannot sell even if they wanted too. Who would buy?
japan? lol
Quote from The Kin2:
This is even better than Europeans buying Manhattan from the Indians.
China cannot sell even if they wanted too. Who would buy?
Investors at "Fair prices".
The nuclear option would push T-Bill prices down a lot. Enough to jack rates into recession.
Whats the outstanding float on Bonds?
Chinas got 1.5 Trillion worth at todays value.
Cutting rates isn't going to solve anything. One of the side effects of cheap money is speculation.
Low rates caused people to flood the stock market which caused the 2000 crash. The fed lowered rates to reduce the impact of the crash. This led to speculation in the housing market. The fed is going to lower rates to reduce the impact which will cause more speculation. It's just delaying a car crash. If the fed cuts rates again be on the lookout for another speculative bubbble elsewhere...
Bailing out speculating banks like countrywide creates a moral hazard... it creates an incentive for the banking system to take huge risks because there are no consequences.
I sold all of my Bank of America stock today at a loss. I realized the write downs are not going to end... there's going to be a lot of banks report 10 billion dollar write downs left and right probably for several quarters. And if banks have to suspend dividends like WM and CFC... oh boy look out below.
Low rates caused people to flood the stock market which caused the 2000 crash. The fed lowered rates to reduce the impact of the crash. This led to speculation in the housing market. The fed is going to lower rates to reduce the impact which will cause more speculation. It's just delaying a car crash. If the fed cuts rates again be on the lookout for another speculative bubbble elsewhere...
Bailing out speculating banks like countrywide creates a moral hazard... it creates an incentive for the banking system to take huge risks because there are no consequences.
I sold all of my Bank of America stock today at a loss. I realized the write downs are not going to end... there's going to be a lot of banks report 10 billion dollar write downs left and right probably for several quarters. And if banks have to suspend dividends like WM and CFC... oh boy look out below.
Quote from trefoil:
Global rebalancing.
We have to export more, China has to consume more. Our exports are going up, hence the good MSFT earnings, which have nothing to do with US consumers, btw. Almost all of our tech cos reported blowout earnings, and that has to do with exports. Tech is what we export.
Housing is a drag, but exports are a boost.
The Fed knows this, and if they cut, they cut because of this reason, more than anything else.
As for the Chinese, Ben will answer as John Connally did in 1971, when Nixon closed the gold window: "It's our currency, but it's your problem." The Chinese may not like hearing that, but I for one ain't Chinese.
Right on, and you know what. If I am the Chinese government, I will not care about whether my US reserve will depreciate or not. The fact that the country enjoy good GDP growth is worth everything. Just like companies, they always sacrifice balance sheet for growth.
However, if inflation is too high for China, they will adjust their exchange rate to keep inflation in control which is what you are seeing right now.
Quote from poyayan:
Right on, and you know what. If I am the Chinese government, I will not care about whether my US reserve will depreciate or not. The fact that the country enjoy good GDP growth is worth everything. Just like companies, they always sacrifice balance sheet for growth.
However, if inflation is too high for China, they will adjust their exchange rate to keep inflation in control which is what you are seeing right now.
GDP growth in depreciating dollars?
Maybe we should check their growth in Australian dollars or in euros?
As Einstein said it all depends on your point of view
From Australian point of view China in recession
Quote from kashirin:
GDP growth in depreciating dollars?
Maybe we should check their growth in Australian dollars or in euros?
Not only depreciating dollars, but inflated prices. If GDP were measured in "widgets and services produced", we might be in recession right now and few would know. But as long as the Fed keeps the money-pump flowing, and everybody behaves like their LIES about inflation are the truth... it's "party on Wayne".
The big picture must also take into account unemployment which will be rising over the next quarters to come.
It's damn hard to teach a real estate agent, mortgage originator and investment banker how to program computers, build a Harley, or conduct the chemical compounding necessary to produce pharmaceuticals which are being counterfeited overseas.
Depreciate the dollar to export our way out of the problem will not work if the dollar accelerates its decline. Right now it's a no-brainer trade to shor the dollar and that will only increase with every interest rate cut.
Overseas sales are just grand as long as the sales come faster than the input cost rise. Right now there's a tipping point that is fast approaching.
BTW, the world has not learned the US value of spending beyond their means so waiting for the world to consume in order to help the US is a bit of a losing proposition. After all the Japanese government is still waiting for its citizens to start consuming..... it's been about 15 or so years now.
Good Luck!
It's damn hard to teach a real estate agent, mortgage originator and investment banker how to program computers, build a Harley, or conduct the chemical compounding necessary to produce pharmaceuticals which are being counterfeited overseas.
Depreciate the dollar to export our way out of the problem will not work if the dollar accelerates its decline. Right now it's a no-brainer trade to shor the dollar and that will only increase with every interest rate cut.
Overseas sales are just grand as long as the sales come faster than the input cost rise. Right now there's a tipping point that is fast approaching.
BTW, the world has not learned the US value of spending beyond their means so waiting for the world to consume in order to help the US is a bit of a losing proposition. After all the Japanese government is still waiting for its citizens to start consuming..... it's been about 15 or so years now.
Good Luck!
Yea its looking like the market is going to be strong into the fed.
Why the hell should they cut here now? We could correct from 1550-1570 easy.
Sell those ZQs...
they aren't cutting. If I'm right, this may be a great dip to buy the USD.
Summary: If they cut, they do anything to defend credit markets and stock markets. If they hold, they actually care about inflation.
Why the hell should they cut here now? We could correct from 1550-1570 easy.
Sell those ZQs...
they aren't cutting. If I'm right, this may be a great dip to buy the USD.
Summary: If they cut, they do anything to defend credit markets and stock markets. If they hold, they actually care about inflation.