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The_Red_Crayon
Exposer of Truth


Registered: 08/13/03
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Why do the feds keep cutting the rate?
#7861221 - 01/10/08 07:35 PM (16 years, 22 days ago) |
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Dont they realize that they are begging for inflation? Theres investors out their shitting their pants over each rate cut. The feds are trying to stimulate growth with the wrong tactics. Theirs a problem and they say lets inject more currency into the market, lets open the discount rate, lets cut interest rates. These are temporary fixes to a longterm problem.
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Ahab McBathsalts
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Registered: 11/25/02
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Re: Why do the feds keep cutting the rate? [Re: The_Red_Crayon]
#7862704 - 01/10/08 11:31 PM (16 years, 22 days ago) |
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Its really a case of stagflation. Expected recessionary growth as well as inflation caused by $100 a barrel oil and food supply concerns. The Fed as well as many other central banks are cutting rates coming into 2008 and are looking for zero to low economic growth for many countries this year.
The fed is pinned at either losing GDP or increasing inflation.
And further expect the price of gas to be sky high in May.
-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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Asante
Mage


Registered: 02/06/02
Posts: 86,795
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Re: Why do the feds keep cutting the rate? [Re: The_Red_Crayon]
#7863477 - 01/11/08 02:50 AM (16 years, 21 days ago) |
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They are frantically trying to avoid what to me seems inevitable: a recession, maybe the death of the dollar.
In 2002 the dollar and euro exchanged 1:1 Now they exchange $1.50:1
America is the guy in the restaurant who can't pay the bill and postpones getting the bill by ordering more and more.
You've lived beyond your means for decades and the time is nigh you can put it off to pay for it no longer.
My guess is Bush makes a wonderful farewell and your next president gets to pick up the pieces and will become very unpopular for what he has to do to save the nation.
You're loaning $800.000.000.000 each year from foreign nations to live beyond your means, eating the world's resources with a voracious appetite. This has to change.
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Icelander
The Minstrel in the Gallery



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Posts: 95,368
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Re: Why do the feds keep cutting the rate? [Re: Asante]
#7864771 - 01/11/08 12:17 PM (16 years, 21 days ago) |
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What would be your financial advice for individuals (us) who will have to deal with this reality? (if it is reality)
-------------------- "Don't believe everything you think". -Anom. " All that lives was born to die"-Anom. With much wisdom comes much sorrow, The more knowledge, the more grief. Ecclesiastes circa 350 BC
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GnosticWarrior
Hermit


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Re: Why do the feds keep cutting the rate? [Re: The_Red_Crayon]
#7865801 - 01/11/08 04:32 PM (16 years, 21 days ago) |
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Because the people in our society want their freedom but act like children. Sometimes I wonder if the powers that be try to a manipulate the masses or are their decisions made to appeal to them?
Read this article about the city of Cleavland and their lawsuit against mortgage lenders: http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080111&id=8027028
The solution is not lawsuits. But education, financial education being taught in public schools. When you graduate highschool every student should be able to understand all the terms and consequences they would face when applying for loans. Maybe this credit crisis is a sign of the failure of public education to prepare students for the real world?
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art
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Re: Why do the feds keep cutting the rate? [Re: GnosticWarrior]
#7865818 - 01/11/08 04:35 PM (16 years, 21 days ago) |
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I am also confused as to why people see a recession as such a bad thing. Recessions can have some positive effects, as long as they are moderate.
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Asante
Mage


Registered: 02/06/02
Posts: 86,795
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Re: Why do the feds keep cutting the rate? [Re: Icelander]
#7866029 - 01/11/08 05:16 PM (16 years, 21 days ago) |
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Well, lets pray that it never happens ofcourse. But if it would.. its hartd to give an umbrella advice for people under vastly diverse circumstances.
If the dollar (or the euro) does collapse there will be days, weeks or months of prices rising dramatically and almost on a daily basis. Then there will be a =measure taken and you guys can convert your old dollars into New Dollars or Ameros or how they'll call it.
It is important to know you won't just be screwed by the prices rising, you will be SCREWED OVER with the introduction of the new currency. It happened with the Euro.
Needless to say, it would be good if most of your wealth wasn't in the form of Dollars during that dramatic decline, but in the form of a commodity that preserves value. I like gold, silver and real estate but it caqn be anything really. Picture this:
On May 1 you as a musician buy a beautiful guitar on eBay for $1.000, and you have $1.000 in your wallet. Then days later a hyperinflation kicks in which stabilizes at the end of the month.
Let's say its a hyperinflation of Argentinian proportions.
On June 1 your $1.000 in your wallet only has the purchasing power of $50 left. Ouch. Your guitar however would now be worth $20.000 of the inflated dollar.
You lost purchasing power on your wallet, but a good guitar remains a good guitar - it retains purchasing power.
Guitar, new car, gold coins, silver bars, guns & ammo, the house you live in, a carton of marlboros.. it would all retain purchasing power.
If the shit starts approaching the fan, make sure that you have:
1..food and drink for the family for a month or so 2..convert dollar assets into tangible assets which retain purchasing power
Later on buying food will become a FIGHT and everyone will buy anything to get rid of their dollars. This in fact drives a hyperinflation. Be ahead of that misery. Make sure you can get yours, when it is still abundant and at a fair price.
If you have some money, owning the house you live in is of crucial importance because rent will soar. Try to stay out of debt or get out of debt as rapidly as you can.
In the olden days people had a pantry with the foods to last them through the winter, like squirrels do. Be a squirrel and have a food supply because when the trucks stop stocking the stores, the isles are CLEARED in three days.
I'm not saying ufos will land, or the commies will invade or anything wild like that. I'm warning dire times may be ahead, and it would be wise to take the precautions people all over the world have routinely taken for thousands of years.
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Asante
Mage


Registered: 02/06/02
Posts: 86,795
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Re: Why do the feds keep cutting the rate? [Re: art]
#7866072 - 01/11/08 05:24 PM (16 years, 21 days ago) |
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Quote:
Recessions can have some positive effects, as long as they are moderate.
Qui Bono?
Who will benefit from recession?
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Penguarky Tunguin
f n o r d


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Posts: 17,192
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Re: Why do the feds keep cutting the rate? [Re: Asante]
#7866076 - 01/11/08 05:24 PM (16 years, 21 days ago) |
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Are you saying "buy shit"?
-------------------- Every mistake, intentional or otherwise, in the above post, is the fault of the reader.
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Asante
Mage


Registered: 02/06/02
Posts: 86,795
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Well not shit 
Stuff thats useful to you and which retains value which you can reclaim by selling.
when one day a hyperinflation really is approaching, buy buy buy before the masses do.
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art
Stranger
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Re: Why do the feds keep cutting the rate? [Re: Asante]
#7866368 - 01/11/08 06:35 PM (16 years, 21 days ago) |
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I think you are over reacting a bit.
recessions don't necessarily help people but it helps clense the economy.
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Veritas


Registered: 04/15/05
Posts: 11,089
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Re: Why do the feds keep cutting the rate? [Re: Asante]
#7866381 - 01/11/08 06:38 PM (16 years, 21 days ago) |
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Quote:
In the olden days people had a pantry with the foods to last them through the winter.
One of my favorite things about my house is the HUGE, walk-in pantry closet. I have bulk black & pinto beans, rolled oats, brown rice, seeds for sprouting, lentils, garbanzo beans, canned coconut milk, aseptic packs of broth & almond milk, a stock of multi-vitamins, and so on.
I plan to add on to my stock as my finances allow, but for now I have a decent selection of the basics.
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GnosticWarrior
Hermit


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Re: Why do the feds keep cutting the rate? [Re: Icelander]
#7866510 - 01/11/08 07:34 PM (16 years, 21 days ago) |
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I don't see a real doomsday senario. Its just that your USD will have less purchasing power. Right now I'm am in the process of selling my USD and buying an agricultural commodity index - RJA
Here's what Jim Rogers is saying: http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/v2Qorx1suyUc.asf
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KillerPicklez



Registered: 12/13/07
Posts: 16,920
Loc:
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Re: Why do the feds keep cutting the rate? [Re: GnosticWarrior]
#7868023 - 01/12/08 02:54 AM (16 years, 20 days ago) |
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I tend to agree with Wiccan_Seeker I think the economy is heading for a major collapse. The housing market is in shambles, we saw that with Countrywides selling to Bank of America. As Wiccan also pointed out, the dollar is at an all-time low. I think the stock markets will continue to fall, which is why ive decided to wait on buying at the moment. Im holding my current investments and freezing my assets on buying more. People say right now is the time to buy buy buy, but i think that time will be sometime in the next 9-12 months.
With our current dependency on foreign nations for energy, that only hurts our situation even more.
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YidakiMan
Stranger


Registered: 09/28/02
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Re: Why do the feds keep cutting the rate? [Re: KillerPicklez]
#7868295 - 01/12/08 08:06 AM (16 years, 20 days ago) |
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I don't think major collapse is possible short of WW3 and complete dissolution of the worlds governments. There are too many controls.
The market will be closed to prevent panic sell offs. The banks will be closed to prevent panic money runs....
We are dependent on foreign oil, but the majority of that is Canadian and I don't see any instability up der, eh.
I don't see anything like '29 happening again, ever.
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Cubie
Moderator




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Re: Why do the feds keep cutting the rate? [Re: YidakiMan]
#7868306 - 01/12/08 08:18 AM (16 years, 20 days ago) |
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Crayon you are completly right. What it really is, is that bush is doing whatever the fuck he wants and is ignoring congress so we got our 2 main branches bumpin heads causing the chicken with its head cut off effect. It doesn't matter what they do were going into resession. You see by creating inflation you make things cheap here. So rich people all over the world flock here to buy tons of shit. Its their best stratedgy yet. And also proves our country is in trouble for them to be taking such drastic measures.
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Coaster
Baʿal



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Re: Why do the feds keep cutting the rate? [Re: Cubie]
#7869879 - 01/12/08 05:19 PM (16 years, 20 days ago) |
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this thread is depressing
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Asante
Mage


Registered: 02/06/02
Posts: 86,795
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Re: Why do the feds keep cutting the rate? [Re: Coaster]
#7870005 - 01/12/08 05:45 PM (16 years, 20 days ago) |
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In what way?
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elnico
NICO



Registered: 09/05/07
Posts: 92
Loc: Netherland
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Re: Why do the feds keep cutting the rate? [Re: Asante]
#7874432 - 01/13/08 05:16 PM (16 years, 19 days ago) |
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i was thinking maybe buying some canadian dollars? what do you think?
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The_Red_Crayon
Exposer of Truth


Registered: 08/13/03
Posts: 13,673
Loc: Smokey Mtns. TN
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Re: Why do the feds keep cutting the rate? [Re: elnico]
#7874549 - 01/13/08 05:44 PM (16 years, 19 days ago) |
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Wise investment, they are so full of natural resources, Canada is a rising star, will probably become a world power in 20 years.
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Asante
Mage


Registered: 02/06/02
Posts: 86,795
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Re: Why do the feds keep cutting the rate? [Re: elnico]
#7876841 - 01/14/08 01:21 AM (16 years, 18 days ago) |
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I think Canadian Dollars are a better bet than US dollars atm, seeing CAN outperformed USD.
Bernacke's (sp?) plan to cut the rate even further will almost inevitably cause another spurt of inflation. I'd say if you're going to do it, do your research and act fast.
You might transfer money digitally to an established Canadian bank, if there are no nasty rules getting in the way of that.
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Edited by Asante (01/14/08 01:22 AM)
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Coaster
Baʿal



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Re: Why do the feds keep cutting the rate? [Re: Asante]
#7876883 - 01/14/08 01:43 AM (16 years, 18 days ago) |
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b/c it shows how our economy is screwd and our out of control spending is the key i wish those trillions of dollars we spent on that war went to our homeland
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