[Toddsterpatriot]

Ping!

[mysterio]

Cutting spending to fit what we actually have coming in does wonders, as well.

But what fun is that? PRINT MORE MONEY!!

[Petronski]

Best part of this whole situation so far was watching Bernanke crack the bears in the kneecaps last Friday.

[Incorrigible]

People scoff and think M1 and M2 are outdated but they’ve been off the charts for years. Now that the demand for the dollar is low, that may produce a higher dollar relative to the Euro. However that won’t last long. The dollar is still going down. Down, down, down until the ChiComs agree to a reevaluation!

[RightWhale]

That would explain how the $US was at 1.34 against the $EU and is now, after the rate cut, 1.36.

[Moonman62]

Targeting higher interest rates to combat inflation is very much a Keynesian concept whereby central banks seek to reduce economic activity as well as prices. Contrary to current Fed objectives, the surest way to decrease dollar demand and ultimately cause a net excess of dollar liquidity that would spark new inflationary pressures would be to target the economy for slower growth with higher interest rates.

Sounds familiar to me.

[Moonman62]

Ping to the ding-a-ling:

Overall, lower gold prices, a stronger dollar against the euro, lower long-term bond yields, and rising equity valuations are indisputable hallmarks of a disinflationary environment — not a resurgence of inflation.

[winodog]

Lets see if I have learned anything

So, low dollar, high dollar, who cares? The US economy is so strong it will pull the dollar up if it goes to far down and down if it goes to far up? Hang on and enjoy the ride.

[Tripleplay]

The dollar is currently close to 30 year lows compared to a basket of foreign currencies. It has lost 30% against the Euro the last five years.

And lowering rates will make this equation more favorable?

[live+let_live]

“When the Fed reversed course in 1975, lowering its rate target from 13 to 4.75 percent, gold actually fell 23 percent. When the Fed raised the funds rate all the way to 14 percent in 1980, rather than strengthen, the dollar fell, driving the price of gold from $150 an ounce to an all-time-high of $892.”

I wonder about causation. Did the value of Gold change in reaction to the Fed’s moves or did the Fed change to stop dollar problems which then showed up in the price of gold?

I’ve been trying to get a handle on the value of gold versus the dollar and its abilty to predict general economic trends. First I think gold and oil are poor commodities to use since they raise and fall on other than just pure economic news. Maybe lead? I don’t know. Anyway I did some quick and dirty analysis and found gold and oil and lead seem to be closely tied.

Just an amateur economist with lots to learn.

[familyop]

Cut the rate when necessary. If we’re going to keep the big import industry going for a little while, the dollar must fall to equalize with foreign currencies. And eventually, America will have to get back to real work (more manufacturing).