Want to see $120/barrel oil? Cut interest rates some more.
Our monetary policy at this moment in time is a disaster.
One can see it reflected in the price of everything from gas, to milk, to bread.
Note to Bernahke: STOP CRASHING THE DOLLAR!!!!!
Bernahke = Bernanke
I’m in 100% agreement with your observation. It looks as if the Fed is doing everything it possibly can to weaken the dollar.
The more the dollar crashes in value the less house prices will fall in terms of dollars. The less the numbers fall the less losses for the banks, again in terms of dollars. The less the banks lose the less the fed has to bail them out directly.
So it looks like to me they are doing it on purpose.
The fed is spreading the losses to everyone who holds dollars (or assets that are in dollars) and away from the banks by devaluing the dollar. Everyone’s savings are devalued. The federal governments debt is now less even though the numbers are huge, each dollar owed is worth substantially less so it take less actual wealth to pay it back.
We as a nation have become poorer. But that’s what happens when you borrow more than you can pay back...
Just my 2 cents...
I have to agree that this makes little sense, in that things just continue to spiral around the bowl faster and faster.
I may be wrong, (and I’m sure one of my friends here will correct me if I am) but all I have seen to date are actions that just push the resolution of this problem further away, and in fact are making things worse.
The problem before us are tens of thousands of bad loans that should never have been made in the first place, and now that these institutions are feeling the heat, the Government is stepping in to loan them more money at cheaper rates?? How does that do anything to fix the root problems??
The Congress is out there looking at ways to keep some of these irresponsible borrowers in homes they never could afford, with mortgages that should never have been made in the first place.
Remember this boys and girls: all of this started back in the late seventies when the Congress decided that everyone “deserved” to own a house. Back then only about 30% of people owned their homes, and we peaked recently in the low 90% range. This current crisis is largely just the latest symptom of that decision.
In order to increase home ownership, the Congress has legislated away many of the financial safeguards that made this problem possible in the first place. Even 10 years ago, it was inconceivable that anyone could borrow more than their home was worth, or get a mortgage with zero down payment, or make interest only payments on a mortgage, and the concept of a 50 or more year mortgage was unheard of...yet all of those things (and more) are what have driven us to where we are today.
I’m of a mind now that we are probably on the cusp of another collapse of World Financial Markets over this. There’s no easy fix for an EU Investor-owned Derivative Instrument that consists of large numbers of $500,000 loans on homes that are worth $150,000, and are in foreclosure or default. Someone is going to lose on that deal, and it’s the greedy dumbasses who bought those instruments on the promise of a fast buck who are left holding the empty bag. There just isn’t any good way to fix that without serious financial repercussions on a global scale.
We are about to see $120 a barrel at the current Fed funds rate. $140 a barrel anyone?
6 months ago “palmer” said BurnYankee would inflate like hell, and that is exactly what BurnYankee is doing...
I thought it was a disaster back when the yield curve was inverted.
Gold bug.