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Old 06-26-2008, 06:32 AM
2,197 posts, read 6,814,842 times
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I think they'll raise this fall, as Bernanke has been hinting. Consumer confidence is so low right now and they didn't want it to plummet more. Main Street America doesn't recognize the positive aspects of raising rates. Their perception is negative and the response would be panic, so I think the Fed is trying to hold off on that. Plus, the Dow is bouncing off the low and raising rates would create a lower low, telegraphing a bear market. So more panic all around. The Fed just bought a little time before submitting to the inevitable. I doubt Ben's finger is going to hold the dyke.
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Old 06-26-2008, 06:49 AM
Location: Charlotte, NC (in my mind)
7,946 posts, read 15,397,549 times
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Most Americans, including Mr. Obama have no idea about the value of the dollar, why its a problem, and why it should be fixed. Expect to see the Euro near $1.70 or higher if the housing bailout bill passes. Also expect an immediate oil rally adding another $20-30 to the price.
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Old 06-26-2008, 08:10 AM
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,805,562 times
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Originally Posted by janb View Post
I think we (US) shot ourselves in the foot on gaining the confidence of investors... ( Enron, Worldcom, sub-prime, and now LOW returns + huge 'spread' making banks lots of dough).

Ben has his hands full, not sure there is a silver bullet, or maybe us 'retiree's (fixed income) will take the hit. I wonder what the US has as a 'value' to get our trade deficit improving. Foreign Direct Investment may come back if China government messes up, but... They are playing a pretty straight game at the moment, the Olympics offer them a great 'promotional' if they get it right. Maybe we need to upset our own apple cart and have some other countries come 'help-us-out'. I'm afraid its going to take a crisis of some type.
That the problem. We have lost the confidence in investor. Now Bernake is going to have to take some tough measures to save the dollar. I don't think he will raise interest rates quickly, but I see hikes coming by October. Now in the short term this will pain for most of us. But over the long view It will help keep inflation down and strengthen the dollar to where investor will hopefully find confidence in the U.S. again.
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Old 06-26-2008, 08:39 AM
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He's hoping low interest rates will force investors into buying mortgage debt and bail out the banks. The problem is that the US is broke. WS has to look overseas for financing. The foreign investors have more options on where they can invest for fixed-income now that rates are rising elsewhere.
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Old 06-27-2008, 02:35 PM
Location: Heartland Florida
9,324 posts, read 24,260,387 times
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So you think Ben will shut down the helicopter and tighten the money creation? I think the FED wants to inflate our money away.
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Old 06-27-2008, 02:40 PM
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I wonder how much big business is paying the Fed to keep rates low... thats a better question..
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