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US Dollar plummets today

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Originally posted by: Aharami
so does this mean house prices will be going back up? How does this affect people looking to buy houses in the near future?
Click to expand...

Long-term borrowing rates are not affected by the short-term rates all that much. Housing now depends on the liquidity in the markets. With foreclosures shooting through the roof, too many people owing too much money, and inflation pressures now going to be hurting consumers, I highly doubt liquidity will return.

Housing prices still need to come down quite a bit yet. Heck, there were more houses added to the market *just* from foreclosures in August than all sales in August. That doesn't even include houses taken off the market due to non-sale, nor houses added to the market due to new sales, nor new houses.

This *might* hold off a recession but it probably won't prevent one.
 
they're trying to make US CANADA and MEXICO one nation. and use a common currency called the Amero (dunno the spelling) notice how us$=CND? and notice how they aren't doing anything about the illegal mexican immigrants?
 
Originally posted by: LOUISSSSS
they're trying to make US CANADA and MEXICO one nation. and use a common currency called the Amero (dunno the spelling) notice how us$=CND? and notice how they aren't doing anything about the illegal mexican immigrants?
Click to expand...

Notice how there are so many freaks today? In order for this to happen you need a constitutional amendment, nobody has heard anything about it, if it did happen Congress would be removed immediately, and it would be stricken.

Get a grip on yourself, take some drugs, and come back later.

I guess the Amero failed in 1976 when the CAD=USD before, eh?
 
Originally posted by: LegendKiller
Ahhh yes, armchair "financial and economic gurus", ones that control a multi-seller conduit worth billions. Yeah, I am a know-nothing bumbfvck who just happen to work on the Street. Please dude, try your stupid degrading tricks on somebody else.
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Dude, chill out and get over yourself. I'm sure you're not impressing anyone here with your "multi-seller conduits worth billions". You sound like a peon pretending to be a wall street bigshot -- you probably replace backup tapes at night at Golden Slacks 😛 I don't care what your epenis credentials are, I'll take those of Bernanke and the FOMC group over yours any day of the week, twice on Sunday. Everyone has their take, but since nobody has a crystal ball, we'll just have to see. It's obviously not as simple or clear-cut as you make it out to be, there's plenty of disagreement among 'experts' as to what this means in the short and long term.........

Agreeing with it is being morally and intellectually dishonest at how this will negatively impact our economy in the long term.
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....or, perhaps like everything else it's not quite that black and white, and I don't pretend to know the answers. Sounds like you have high blood pressure, you need to relax! Have a :beer: or two 🙂
 
Originally posted by: PokerGuy
Originally posted by: LegendKiller
Ahhh yes, armchair "financial and economic gurus", ones that control a multi-seller conduit worth billions. Yeah, I am a know-nothing bumbfvck who just happen to work on the Street. Please dude, try your stupid degrading tricks on somebody else.
Click to expand...
Dude, chill out and get over yourself. I'm sure you're not impressing anyone here with your "multi-seller conduits worth billions". You sound like a peon pretending to be a wall street bigshot -- you probably replace backup tapes at night at Golden Slacks 😛 I don't care what your epenis credentials are, I'll take those of Bernanke and the FOMC group over yours any day of the week, twice on Sunday. Everyone has their take, but since nobody has a crystal ball, we'll just have to see. It's obviously not as simple or clear-cut as you make it out to be, there's plenty of disagreement among 'experts' as to what this means in the short and long term.........

Agreeing with it is being morally and intellectually dishonest at how this will negatively impact our economy in the long term.
Click to expand...
....or, perhaps like everything else it's not quite that black and white, and I don't pretend to know the answers. Sounds like you have high blood pressure, you need to relax! Have a :beer: or two 🙂
Click to expand...

What I always find amusing about the internet is the way that some people are more than willing to give obvious credit and a little bit of knob polishing to somebody like Bernanke. They toss the name around like they are stroking the guy off themselves. However, when it comes to somebody else stating some of their credentials, it's somehow horrible that it is done. Naturally, when you're face to face with that type of git, they don't dare do something like that, because you can just bitch-slap them down like the ass they are.

I'm not an MD or an SVP, but I know my way around things, which is why I am where I am. I don't work at GS either, nor would I ever want to. However, when it comes to seeing the long-term effects, I don't need to be on the FOMC board, or desperately trying to be cool while stroking HeliBen off, as you so strongly desire to do, I just have to look at history and the logical effects of such a move.

1. History has shown that countries who attempt to control their economy through the central bank eventually fail to do so, resulting in worse economic situations. Refute this.

2. Loose monetary policy results in inflation, currency depreciation, and eventual economic hardship. THe dollar is already tanking, almost reaching CAD parity for the first time in 31 years. In 1976 what was about to happen? 16% inflation, that's what.

3. People say that currency depreciation will be good, we will inflate our way out of debt. That's what Ze Germanz tried to do after WW1, they were in a worse Great Depression than we were, until Hitler came along. Additionally, they mention that it will make our exports cheaper. That's only the case if our exports will get cheaper than competitors' exports, since China more or less has their currency pegged to ours, they won't.

4. People say that Recessions need to be avoided. This is really a moronic statement. We went from the massive growth of the tech boom, had a minor correction, then went to the massive growth of the housing boom and still have yet to have even a minor correction. Now we attempt to stave off a correction by continuing a disasterous credit cycle.

This is, to me, the most traitorous attempt at propping up an economy in history. Economic growth happens when a country produces goods and services in excess of what is needed to sustain population growth. This growth often gets out of control, leading to increased prices through increased pricing of input goods, inflation. It is moderated by the Fed to protect the currency. However, the following periods must regress to the mean if it was exceeded.

After 2001 GDP was in a slide, the only thing that saved it was the loose credit and the plethoric use of equity to produce consumption. It's easy to find charts everywhere that show this. This situation continued and while GDP would have been strong in the last 2-3 years, it would have been ~50% of what it was.

This leads to the current situation, a credit crunch. As people have recognized that credit was the only thing driving the economy and it had become way too lose, they tightened. Now we are paying the pied piper. However, many still think that we should loosen credit more to stave off yet another correction.

That will be two corrections from over-heated markets that we will have fought off using loose monetary policy. Naturally one would question that if this was happening, then inflation would be higher. The rub comes with the inflation benchmarks used. They have been so corrupted by manipulations that they are wholly unreliable at this point. Inflation is really about 50% higher than any official benchmark and raising. You can see evidence of this in your every-day life, and many places online that are much more impartial.

Greenspan has recently warned about the coming stagflation as a result of the policies of the last 7 years. 10% Fed rates will be the only thing staving off rampant inflation in the teens. HOwever, to do this will cut back on the economy dramatically. All because we couldn't take our licks.

You're the type of person who somehow thinks that there are multiple reasons for this type of cut. However, anybody that's rational knows there was one reason. Wall St. didn't like Bernanke, look at what Cramer blew up about. He was mad Helicopter Ben hadn't rescued them yet, protecting his buddy's bonuses.

Now it comes out that the NAR/MBA lobbied Bush extensively this year to get this stuff pushed through. That includes a rate cut, increasing the Jumbo Loan amount, getting FHA to insure more delinquent/almost foreclosure homes, increasing Freddie/Fannie's ability to buy subprime MBS, and a bailout of the industry.

Everybody counted on Helicopter Ben to bail them out. They knew he would eventually if they bitched and moaned enough, because he *IS* Helicopter Ben (go read what that means). He doesn't give a crap about inflation, he only cares about preventing a recession and saving his buddies.

That's the ironic part, since a central bank is supposed to be the exact opposite. Independent, currency and inflation minded, liquidity minded, and non-political. We have the exact opposite now and the effects are already seen.

If this was a good move, then the whole world wouldn't be depreciating our currency, nor would they themselves be *RAISING* interest rates (check out what the ECB, London banks, and others are doing), in times like this. They know the problem.

Who do you trust? An impartial Fed, or the whole world? Naturally you're going to say the Fed, but thats probably because your bonus depends on it.

At least one of us can be intellectually honest. My bonus depends on it too, but I am not willing to sink this country for it.
 
Originally posted by: LegendKiller
Originally posted by: Engineer
Originally posted by: PokerGuy
It's rather amusing reading the comments of all you brilliant armchair financial and macro economic gurus. Clearly, you are more informed and privy to way more information than those silly folks at the fed just throwing darts at a rate chart 😛

I'm somewhat skeptical of knee-jerk measures in response to market conditions, but I'm sure the fed did not take this lightly. They probably see some very dark clouds on the horizon in terms of the credit crunch etc if no drastic action is taken. I dunno, we'll see.

Originally posted by: LegendKiller
Why do people think we should prevent recessions? That is the most asinine idea I have ever heard.

You cannot outstrip what should be normalized economic growth and then expect not to regress to the mean at some point. The mere idea that you can keep growing at high rates in perpetuity is ridiculous.
Click to expand...
Uuuuuuuuh... you really don't understand what the fed does. They try to smooth out the rise and drops in the normal economic cycle. Clearly, smooth rises and smooth landings are much better than steep drops and jumps. So yes, you can't grow the economy at a high rate forever, but you can smooth out the swings.
Click to expand...

I thought the FED's job was to keep a steady dollar (not too much inflation or deflation, balance liquidity, etc), regardless of the resulting or underlying economy...but I'm an Engineer, not an economist! 😛
Click to expand...

Obviously you know nothing too, because anybody who doesn't agree with the revisionist history of a Fed's role, is an "armchair financial expert and economist".

Feh.
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Edit: Removed because my sarcasm meter was broken and replaced with an apology to Legendkiller. Sorry mate! 😱
 
Originally posted by: Engineer
Originally posted by: LegendKiller
Originally posted by: Engineer
Originally posted by: PokerGuy
It's rather amusing reading the comments of all you brilliant armchair financial and macro economic gurus. Clearly, you are more informed and privy to way more information than those silly folks at the fed just throwing darts at a rate chart 😛

I'm somewhat skeptical of knee-jerk measures in response to market conditions, but I'm sure the fed did not take this lightly. They probably see some very dark clouds on the horizon in terms of the credit crunch etc if no drastic action is taken. I dunno, we'll see.

Originally posted by: LegendKiller
Why do people think we should prevent recessions? That is the most asinine idea I have ever heard.

You cannot outstrip what should be normalized economic growth and then expect not to regress to the mean at some point. The mere idea that you can keep growing at high rates in perpetuity is ridiculous.
Click to expand...
Uuuuuuuuh... you really don't understand what the fed does. They try to smooth out the rise and drops in the normal economic cycle. Clearly, smooth rises and smooth landings are much better than steep drops and jumps. So yes, you can't grow the economy at a high rate forever, but you can smooth out the swings.
Click to expand...

I thought the FED's job was to keep a steady dollar (not too much inflation or deflation, balance liquidity, etc), regardless of the resulting or underlying economy...but I'm an Engineer, not an economist! 😛
Click to expand...

Obviously you know nothing too, because anybody who doesn't agree with the revisionist history of a Fed's role, is an "armchair financial expert and economist".

Feh.
Click to expand...


I stated for the record that I'm not an economist. I just stated what I "thought". You could have come across somewhat less of an ASS with your "Obviously you know nothing too" statement! :thumbsdown: Goddamn holier than thou people anyway.....
Click to expand...

It was a joke dude, referring to PokerGuy's obvious doofish-ness in this area. He's the one who degraded anybody who wasn't HeliBen or an FOMC chairman, read the above quotes.
 
Originally posted by: LegendKiller
Originally posted by: Engineer
Originally posted by: LegendKiller
Originally posted by: Engineer
Originally posted by: PokerGuy
It's rather amusing reading the comments of all you brilliant armchair financial and macro economic gurus. Clearly, you are more informed and privy to way more information than those silly folks at the fed just throwing darts at a rate chart 😛

I'm somewhat skeptical of knee-jerk measures in response to market conditions, but I'm sure the fed did not take this lightly. They probably see some very dark clouds on the horizon in terms of the credit crunch etc if no drastic action is taken. I dunno, we'll see.

Originally posted by: LegendKiller
Why do people think we should prevent recessions? That is the most asinine idea I have ever heard.

You cannot outstrip what should be normalized economic growth and then expect not to regress to the mean at some point. The mere idea that you can keep growing at high rates in perpetuity is ridiculous.
Click to expand...
Uuuuuuuuh... you really don't understand what the fed does. They try to smooth out the rise and drops in the normal economic cycle. Clearly, smooth rises and smooth landings are much better than steep drops and jumps. So yes, you can't grow the economy at a high rate forever, but you can smooth out the swings.
Click to expand...

I thought the FED's job was to keep a steady dollar (not too much inflation or deflation, balance liquidity, etc), regardless of the resulting or underlying economy...but I'm an Engineer, not an economist! 😛
Click to expand...

Obviously you know nothing too, because anybody who doesn't agree with the revisionist history of a Fed's role, is an "armchair financial expert and economist".

Feh.
Click to expand...


I stated for the record that I'm not an economist. I just stated what I "thought". You could have come across somewhat less of an ASS with your "Obviously you know nothing too" statement! :thumbsdown: Goddamn holier than thou people anyway.....
Click to expand...

It was a joke dude, referring to PokerGuy's obvious doofish-ness in this area. He's the one who degraded anybody who wasn't HeliBen or an FOMC chairman, read the above quotes.
Click to expand...


My apologies then as my sarcasm meter was broke this morning! 😱
 
Originally posted by: PokerGuy
It's rather amusing reading the comments of all you brilliant armchair financial and macro economic gurus. Clearly, you are more informed and privy to way more information than those silly folks at the fed just throwing darts at a rate chart 😛

I'm somewhat skeptical of knee-jerk measures in response to market conditions, but I'm sure the fed did not take this lightly. They probably see some very dark clouds on the horizon in terms of the credit crunch etc if no drastic action is taken. I dunno, we'll see.

Originally posted by: LegendKiller
Why do people think we should prevent recessions? That is the most asinine idea I have ever heard.

You cannot outstrip what should be normalized economic growth and then expect not to regress to the mean at some point. The mere idea that you can keep growing at high rates in perpetuity is ridiculous.
Click to expand...
Uuuuuuuuh... you really don't understand what the fed does. They try to smooth out the rise and drops in the normal economic cycle. Clearly, smooth rises and smooth landings are much better than steep drops and jumps. So yes, you can't grow the economy at a high rate forever, but you can smooth out the swings.
Click to expand...

Wow, you put down the "brilliant economic gurus" and then proceed to tell someone else why they are wrong (while being wrong yourself). Oh the irony :laugh:
 
Checked my bank this morning and 30y mortgage already down to 5 3/4, so this can't be all bad. 🙂
 
Originally posted by: lupi
Checked my bank this morning and 30y mortgage already down to 5 3/4, so this can't be all bad. 🙂
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Because the first thing we need to do is make sure people who should be borrowing more, can!!!
 
One thing that I would like to get clear in my mind anyway is.

Can america afford a recession?

I like others on this board think that we should just let the markets correct and let the cycle run its naturally course. The only problem that I have with this is that the recession isn't only going to take out the extremely greedy overextended investors but it will definitely hit a lot of average everyday people that were (i now ill take some flame for this one) the subprime arm and option arm products by greedy bankers.

before the flame I know it is up to the individual to know what they are getting into.

but i can personnally tell you that I know of more than a few friends etc that were preyed upon by being uneducated about just what they were getting into.

I struggle with weither i feel sorry for these people or think they are getting what they deserve.......?


I think we are on this seesaw rate manipulation that will eventually lead to a severe recession.

Japan of the 90's anyone?

I think they are just putting it off as long as possible.

-fish
 
Man, all I could think of when I heard 50/50 was the WKRP episode when they threw turkeys out of a chopper onto a crowd.

I've noticed the economists think this was a particularly bad move by the Fed, and I agree.

Where's Paul Volcker when you need him 🙁

& I guess when you have fools like Jim Cramer screaming at the Fed, this is the kind of shit that happens...

Look for another 1/4 to 1/2 easing since it's an election year...
 
Originally posted by: fisheerman
One thing that I would like to get clear in my mind anyway is.

Can america afford a recession?

I like others on this board think that we should just let the markets correct and let the cycle run its naturally course. The only problem that I have with this is that the recession isn't only going to take out the extremely greedy overextended investors but it will definitely hit a lot of average everyday people that were (i now ill take some flame for this one) the subprime arm and option arm products by greedy bankers.

before the flame I know it is up to the individual to know what they are getting into.

but i can personnally tell you that I know of more than a few friends etc that were preyed upon by being uneducated about just what they were getting into.

I struggle with weither i feel sorry for these people or think they are getting what they deserve.......?


I think we are on this seesaw rate manipulation that will eventually lead to a severe recession.

Japan of the 90's anyone?

I think they are just putting it off as long as possible.

-fish
Click to expand...

I think the proper question is whether or not we can afford to *not* have a recession.

I have a friend at work who is Argentinian. He mentioned that recessions are bad, this is coming from a guy from a South American country, which are notorious for not learning economics lessons. I explained it like this.

Let's consider the past 10 years.

If "normal" growth was supposed to be 3% per year, then we would have a simple (non-compounded) growth of 30%.

However, if you grow in the following pattern...

Y1-6%
Y2-6%
Y3-6%
Y4-4%
Y5-5%
Y6-6%
Y7-6%
Y8-6%
Y9-6%
Y10-6%

Then you have grown 57%, outstripping your "normal" growth by 27%, equiv to 9 years of "normal" growth. Now, there are several ways you can regress to the mean, you can have 9 years of no growth, or you can have a few years of recession, negative growth, or you can have a combination.

However, "normal" mean growth needs to be adhered to in the long run, otherwise you face eventual inflation and also, since much of that growth was borrowed, eventual payback.

However, most people think that you shouldn't regress to the mean, that you can permenantly stave off recession, regardless of your mean digression. This is where you get into manipulating the monetary system to prevent natural contraction, which leads to eventual inflation.

Economic cycles are naturally occurring events. Human psychology naturally becomes too exhuberant, outstripping mean growth even during high-growth periods, it also does the inverse, becoming too bearish in recessionary times. However, there is a long-term natural growth that happens throughout the cycle that is healthy and logical.

Preventing a normal economic cycle by manipulating the monetary system always leads to disaster. Many people forget this. However, they get too caught up in their own greed to recognize that the gains they received in the past were not "normal" and were only borrowed. They refuse to repay those gains through contraction.

This psychology is prevelent in today's economy, one only needs to look at the housing economy to see this. It is a disasterous idea and wholly ignorant to economics, psychology and history. It will lead to this country's downfall.
 
Originally posted by: LegendKiller
Originally posted by: fisheerman
One thing that I would like to get clear in my mind anyway is.

Can america afford a recession?

I like others on this board think that we should just let the markets correct and let the cycle run its naturally course. The only problem that I have with this is that the recession isn't only going to take out the extremely greedy overextended investors but it will definitely hit a lot of average everyday people that were (i now ill take some flame for this one) the subprime arm and option arm products by greedy bankers.

before the flame I know it is up to the individual to know what they are getting into.

but i can personnally tell you that I know of more than a few friends etc that were preyed upon by being uneducated about just what they were getting into.

I struggle with weither i feel sorry for these people or think they are getting what they deserve.......?


I think we are on this seesaw rate manipulation that will eventually lead to a severe recession.

Japan of the 90's anyone?

I think they are just putting it off as long as possible.

-fish
Click to expand...

I think the proper question is whether or not we can afford to *not* have a recession.

I have a friend at work who is Argentinian. He mentioned that recessions are bad, this is coming from a guy from a South American country, which are notorious for not learning economics lessons. I explained it like this.

Let's consider the past 10 years.

If "normal" growth was supposed to be 3% per year, then we would have a simple (non-compounded) growth of 30%.

However, if you grow in the following pattern...

Y1-6%
Y2-6%
Y3-6%
Y4-4%
Y5-5%
Y6-6%
Y7-6%
Y8-6%
Y9-6%
Y10-6%

Then you have grown 57%, outstripping your "normal" growth by 27%, equiv to 9 years of "normal" growth. Now, there are several ways you can regress to the mean, you can have 9 years of no growth, or you can have a few years of recession, negative growth, or you can have a combination.

However, "normal" mean growth needs to be adhered to in the long run, otherwise you face eventual inflation and also, since much of that growth was borrowed, eventual payback.

However, most people think that you shouldn't regress to the mean, that you can permenantly stave off recession, regardless of your mean digression. This is where you get into manipulating the monetary system to prevent natural contraction, which leads to eventual inflation.

Economic cycles are naturally occurring events. Human psychology naturally becomes too exhuberant, outstripping mean growth even during high-growth periods, it also does the inverse, becoming too bearish in recessionary times. However, there is a long-term natural growth that happens throughout the cycle that is healthy and logical.

Preventing a normal economic cycle by manipulating the monetary system always leads to disaster. Many people forget this. However, they get too caught up in their own greed to recognize that the gains they received in the past were not "normal" and were only borrowed. They refuse to repay those gains through contraction.

This psychology is prevelent in today's economy, one only needs to look at the housing economy to see this. It is a disasterous idea and wholly ignorant to economics, psychology and history. It will lead to this country's downfall.
Click to expand...

Where were you when I needed to write essays for English101.
 
Originally posted by: LegendKiller

What I always find amusing about the internet is the way that some people are more than willing to give obvious credit and a little bit of knob polishing to somebody like Bernanke. They toss the name around like they are stroking the guy off themselves. However, when it comes to somebody else stating some of their credentials, it's somehow horrible that it is done. Naturally, when you're face to face with that type of git, they don't dare do something like that, because you can just bitch-slap them down like the ass they are.

I'm not an MD or an SVP, but I know my way around things, which is why I am where I am. I don't work at GS either, nor would I ever want to. However, when it comes to seeing the long-term effects, I don't need to be on the FOMC board, or desperately trying to be cool while stroking HeliBen off, as you so strongly desire to do, I just have to look at history and the logical effects of such a move.

1. History has shown that countries who attempt to control their economy through the central bank eventually fail to do so, resulting in worse economic situations. Refute this.

2. Loose monetary policy results in inflation, currency depreciation, and eventual economic hardship. THe dollar is already tanking, almost reaching CAD parity for the first time in 31 years. In 1976 what was about to happen? 16% inflation, that's what.

3. People say that currency depreciation will be good, we will inflate our way out of debt. That's what Ze Germanz tried to do after WW1, they were in a worse Great Depression than we were, until Hitler came along. Additionally, they mention that it will make our exports cheaper. That's only the case if our exports will get cheaper than competitors' exports, since China more or less has their currency pegged to ours, they won't.

4. People say that Recessions need to be avoided. This is really a moronic statement. We went from the massive growth of the tech boom, had a minor correction, then went to the massive growth of the housing boom and still have yet to have even a minor correction. Now we attempt to stave off a correction by continuing a disasterous credit cycle.

This is, to me, the most traitorous attempt at propping up an economy in history. Economic growth happens when a country produces goods and services in excess of what is needed to sustain population growth. This growth often gets out of control, leading to increased prices through increased pricing of input goods, inflation. It is moderated by the Fed to protect the currency. However, the following periods must regress to the mean if it was exceeded.

After 2001 GDP was in a slide, the only thing that saved it was the loose credit and the plethoric use of equity to produce consumption. It's easy to find charts everywhere that show this. This situation continued and while GDP would have been strong in the last 2-3 years, it would have been ~50% of what it was.

This leads to the current situation, a credit crunch. As people have recognized that credit was the only thing driving the economy and it had become way too lose, they tightened. Now we are paying the pied piper. However, many still think that we should loosen credit more to stave off yet another correction.

That will be two corrections from over-heated markets that we will have fought off using loose monetary policy. Naturally one would question that if this was happening, then inflation would be higher. The rub comes with the inflation benchmarks used. They have been so corrupted by manipulations that they are wholly unreliable at this point. Inflation is really about 50% higher than any official benchmark and raising. You can see evidence of this in your every-day life, and many places online that are much more impartial.

Greenspan has recently warned about the coming stagflation as a result of the policies of the last 7 years. 10% Fed rates will be the only thing staving off rampant inflation in the teens. HOwever, to do this will cut back on the economy dramatically. All because we couldn't take our licks.

You're the type of person who somehow thinks that there are multiple reasons for this type of cut. However, anybody that's rational knows there was one reason. Wall St. didn't like Bernanke, look at what Cramer blew up about. He was mad Helicopter Ben hadn't rescued them yet, protecting his buddy's bonuses.

Now it comes out that the NAR/MBA lobbied Bush extensively this year to get this stuff pushed through. That includes a rate cut, increasing the Jumbo Loan amount, getting FHA to insure more delinquent/almost foreclosure homes, increasing Freddie/Fannie's ability to buy subprime MBS, and a bailout of the industry.

Everybody counted on Helicopter Ben to bail them out. They knew he would eventually if they bitched and moaned enough, because he *IS* Helicopter Ben (go read what that means). He doesn't give a crap about inflation, he only cares about preventing a recession and saving his buddies.

That's the ironic part, since a central bank is supposed to be the exact opposite. Independent, currency and inflation minded, liquidity minded, and non-political. We have the exact opposite now and the effects are already seen.

If this was a good move, then the whole world wouldn't be depreciating our currency, nor would they themselves be *RAISING* interest rates (check out what the ECB, London banks, and others are doing), in times like this. They know the problem.

Who do you trust? An impartial Fed, or the whole world? Naturally you're going to say the Fed, but thats probably because your bonus depends on it.

At least one of us can be intellectually honest. My bonus depends on it too, but I am not willing to sink this country for it.
Click to expand...


nice write up as usual


 
Originally posted by: LegendKiller
What I always find amusing about the internet is the way that some people are more than willing to give obvious credit and a little bit of knob polishing to somebody like Bernanke.
Click to expand...
Yeah, it's almost as amusing as people on the internet pretending to be brilliant experts on just about every subject. :roll: I didn't credit nor discredit the action taken, I'm skeptical of it, but I'm also realistic enough to know that I'm not as well versed in these things as some of the folks making those decisions. Time will tell.

Your post is long winded and full of assumptions such as that I support the cut, that my 'bonus depends on it' etc, all of which are incorrect. You fail to even consider the possibility that <gasp> you might be wrong. I'm at least realistic enough to know that I don't have all the answers, and that there is a possibility that <again gasp> my opinion might not be correct! Oh the horror!. Perhaps your brilliance and clairvoyance to see the financial future are wasted here, you should be the one setting monetary policy. Settle down, take a deep breath. Your rantings on here are equally worthless as all the other posts (including mine), so relax.

People say that Recessions need to be avoided. This is really a moronic statement.
Click to expand...
You fail to account for the fact that there are different levels of recession. If the degree of recession and/or growth can be managed to some degree, then there's not necesarrily anything wrong with managing them. Sharp growth and sharp recessions are both undesirable. You can't just look at these in a financial vaccuum, these things impact the country and the world in more than just pure financial ways. I know, I know, you'll come up with some long winded reason why that's wrong, but the fact is that's how the world works.

You're the type of person who somehow thinks that there are multiple reasons for this type of cut.
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As opposed to someone who is incapable of seeing nuances and different shades of gray instead of only black and white?

At least one of us can be intellectually honest. My bonus depends on it too, but I am not willing to sink this country for it.
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Yep, that one of us is not you, and no, my 'bonus' is in no way tied to the FOMC actions. I recognize that I don't have all the information and that we won't be able to judge the true outcome of this until many years down the road. You seem to think you have all the answers and everyone who disagrees must be a complete idiot. Brilliant!
 
Originally posted by: LegendKiller
Originally posted by: fisheerman
One thing that I would like to get clear in my mind anyway is.

Can america afford a recession?

I like others on this board think that we should just let the markets correct and let the cycle run its naturally course. The only problem that I have with this is that the recession isn't only going to take out the extremely greedy overextended investors but it will definitely hit a lot of average everyday people that were (i now ill take some flame for this one) the subprime arm and option arm products by greedy bankers.

before the flame I know it is up to the individual to know what they are getting into.

but i can personnally tell you that I know of more than a few friends etc that were preyed upon by being uneducated about just what they were getting into.

I struggle with weither i feel sorry for these people or think they are getting what they deserve.......?


I think we are on this seesaw rate manipulation that will eventually lead to a severe recession.

Japan of the 90's anyone?

I think they are just putting it off as long as possible.

-fish
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I think the proper question is whether or not we can afford to *not* have a recession.

I have a friend at work who is Argentinian. He mentioned that recessions are bad, this is coming from a guy from a South American country, which are notorious for not learning economics lessons. I explained it like this.

Let's consider the past 10 years.

If "normal" growth was supposed to be 3% per year, then we would have a simple (non-compounded) growth of 30%.

However, if you grow in the following pattern...

Y1-6%
Y2-6%
Y3-6%
Y4-4%
Y5-5%
Y6-6%
Y7-6%
Y8-6%
Y9-6%
Y10-6%

Then you have grown 57%, outstripping your "normal" growth by 27%, equiv to 9 years of "normal" growth. Now, there are several ways you can regress to the mean, you can have 9 years of no growth, or you can have a few years of recession, negative growth, or you can have a combination.

However, "normal" mean growth needs to be adhered to in the long run, otherwise you face eventual inflation and also, since much of that growth was borrowed, eventual payback.

However, most people think that you shouldn't regress to the mean, that you can permenantly stave off recession, regardless of your mean digression. This is where you get into manipulating the monetary system to prevent natural contraction, which leads to eventual inflation.

Economic cycles are naturally occurring events. Human psychology naturally becomes too exhuberant, outstripping mean growth even during high-growth periods, it also does the inverse, becoming too bearish in recessionary times. However, there is a long-term natural growth that happens throughout the cycle that is healthy and logical.

Preventing a normal economic cycle by manipulating the monetary system always leads to disaster. Many people forget this. However, they get too caught up in their own greed to recognize that the gains they received in the past were not "normal" and were only borrowed. They refuse to repay those gains through contraction.

This psychology is prevelent in today's economy, one only needs to look at the housing economy to see this. It is a disasterous idea and wholly ignorant to economics, psychology and history. It will lead to this country's downfall.
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Legend nice summary I think we are both in understanding that unfetered growth forever is disasterous.

I'm also of the same mindset that it is something that we are just pushing out further and further with all of the policy mucking going on at the fed level.

But one thing that I have been worrying about with our economy as a whole is the globablization issue. I'd like to get your thoughts on the following.

Since the US is pretty much out of the production (ie manufacturing business) what would happen if the economy went in the dumper? I mean for an extended period of time. I worry about a complete collapse (house of cards) that we find the state of america in with no manufacturing base to lean on as support? Although i don't agree I think that this is exactly what the powers that be are trying to advert. ( at least for as long as possible)?

I've always heard that if we go so does the econs of China Europe and other big countries.

I also think that the way they are working the markets that China is just the tip of the "cheap goods" producers. I can see the next moves years from now into Indonesia, India and not to mention all of the out of work Africans. I know that this is happen know but not on the scale of China. With an endless supply of cheaper and cheaper labor couldn't we realistically continue to fight inflation with this strategy?

just some thoughts for discussion? keep it up

-fish

 
Kind of funny, you read some articles from Europe (FT, The Economist, both British I think), and they all think this is a stupid idea on America's part.
 
LegendKiller:

What do you think of Ron Paul's proposals to bring back the gold and silver standard and to dissolve the central bank? (The Federal Reserve for those who do not know what our central bank is.)
 
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