NYC Flush With EUROS and POUNDS.

[MegalosSkylaki]

Stores, my GF tells me, are filled with UK and European languages and accents, as
Europeans, flush with a stronger Currancy, are buying things up in New York City, an International town.

Used to be Japenese many years ago, but they seem to still be having problems.

Magazines in newstand racks still have dual prices: US $5.95 Canada $7.95

Wonder how long before only one price and than a reversal: US $7.95 Canada $5.95 ?

Our dumb, dumb Politicians really screwed things up. Dollar is turning into one of those Latin American currancy that are constantly devalued. Our dumb dumb Politicos still haven't figured out that you can't spend more than you make for a long time --like Brazil did or Argintina.

And you know what?
Our dumb dumb Voters --and non-voters, which is half the People --are to blame, too.
Why? Because they still haven't figured out that Washington is not doing them a favor by giving tax cut to rich while spending more money.

Recent water works Bill that Bush vetoed and congress overode was a good Bill in the main. But you know what? We can't afford it.
Healthcare Bill for kids which Bush wrongly Vetoed at least had a measure attached (cigerette tax) to raise the money to be spent.

Where is the attachment to this Internal Improvements Bill that explains how Congress will pay for it?
Borrrow more from abroad? Wih US Dollars of deminishing value? From a Country that is our once and future enemy?

[Much of the Improvements is for US Corps of Army Engineers to fix up the mess they created in past and will probably create more messes as you can't fight nature. Building levees on river banks doesn't make water go away. Just pushes it downstream. But this is another story.]

Americans can't afford buying homes and Condos that Europeans and UK can. Fly here. Save money. Fly back after holiday. Condos in NYC are being bought with Pounds and Euros before they are built. Smart move is to buy them in cash, before somebody Congress and White House gets some brains and stops devaluing U$ Dollar. But not likely soon. Nor is War Income Tax surcharge in the works.

Democrat$ vye to see who can promise to $pend more.
"No Tax Increase Republican$" are not No $pending Increase Republican$.

Dollar keeps on declining.

MegalosSkylaki

[outlaw2001it]

What makes things even worse is Bernanke is going to give investors a heads up of what the Fed will do in the future in regards to rate cuts, or anything else. The Fed is saying the reason they are going to do this is to give the market a heads up so investors can prepare for what lies ahead. So the way I see it is, when the Fed says they will raise the interest rates next month, investors are going to dump stocks, and take their earnings depriving the U.S. government of extra money from taxes accumulated on those stocks. So the way I see it is, the Fed doesn't want to take money from the rich, but they will take it from the middle to lower class in a heartbeat.
I expect the Fed to raise the interest rate this month, or next because right now there is nothing that is going to help the housing market except time. I feel sorry for the first time buyers that lost houses, but for everybody else that wanted to make money off of their investments...I'm glad they got screwed. The Fed should not have bailed them out by cutting the key interest rate, and lowering the dollar to insignificant levels. Even though the low dollar is helping exports, it is however not showing any progress because of the higher price of oil, and the higher price of imports. It will take another six months to really figure out what the heck is going on with our economy with regards to the weak dollar, and the housing market; unless the Fed does raise the key interest rate this month, or next.

[The Real Bingo]

Get out of debt and buy gold!

[MegalosSkylaki]

Originally Posted by outlaw2001it

What makes things even worse is Bernanke is going to give investors a heads up of what the Fed will do in the future in regards to rate cuts, or anything else. The Fed is saying the reason they are going to do this is to give the market a heads up so investors can prepare for what lies ahead. So the way I see it is, when the Fed says they will raise the interest rates next month, investors are going to dump stocks, and take their earnings depriving the U.S. government of extra money from taxes accumulated on those stocks. So the way I see it is, the Fed doesn't want to take money from the rich, but they will take it from the middle to lower class in a heartbeat.
I expect the Fed to raise the interest rate this month, or next because right now there is nothing that is going to help the housing market except time. I feel sorry for the first time buyers that lost houses, but for everybody else that wanted to make money off of their investments...I'm glad they got screwed. The Fed should not have bailed them out by cutting the key interest rate, and lowering the dollar to insignificant levels. Even though the low dollar is helping exports, it is however not showing any progress because of the higher price of oil, and the higher price of imports. It will take another six months to really figure out what the heck is going on with our economy with regards to the weak dollar, and the housing market; unless the Fed does raise the key interest rate this month, or next.

The Fed (or Federal Gov't for that matter) doesn't raise or lower interest rates, that is a common misconception.

The market economy raises or lowers Interest rates. What if people don't have confidence in US $dollar's future --what happens to interest rates to reward that increased risk taking? What if "lowering" the Fed Overnite or Interbank rate De-minishes confidence in Dollar and raises further fears of inflation. What happens to interest rates then -- to induce that increased risk taking and deminisished value of Dollar?

I understand why this misconception is so common --because the Fed and the Federal Gov't claims it and the media disseminates it.

What the Central Bank does is to increase the money supply or decrease the money supply. Since the Federal Gov't is the biggest debtor, it is happy to see rates cut, and to see a false sense of "all right with the Country and World" because it doesn't want to get the feedback if people knew the truth.

This is a propensity of both "Parties", which are indeed partying while the middle class is clobbered and burdened --but still blissfully "happy" as their stocks are still up becuse 90-day T-bills don't pay as much, or their variable stock-invested 401-K's is relatively high. For now.

Until there is a general re--pricing in regards to affordability of Housing and productivity of Business. Guess which direction that will most likely be, given the gross disparity between Federal revenue and expeditures.

Some people here even suggested that those who favor a tax surcharge to pay for the Iraqui War were just being "anti-war". Unpatriotic ? Don't recall. Of course there are promises that can't be kept in regard to Katrina. The not-that-far-off need to pay off those Funny Money scripts the Treasury wrote to the Social Security Administration to "borrow" (another word for spend) its temporary surplus.

Bush vetoes a spending Bill that provideds for how it will be payed for. Yet Congress overides another Bill that doesn't give a hint about who's going to pay for it or how. More borrowing? More creation of money to borrow? Something wrong in the State of Confusion ?

Again: the Fed makes or destroys money; the market economy sets interest rates.
Right now it's making money. Why? It's nicer that way.

MegalosSkylaki

[outlaw2001it]

Sorry I will have to disagree with you. The Fed's job is to support a strong dollar. When the Fed cut the rates the last time it gave into pressure from the market (investors) who were looking for a rate cut, and not the other way around. The Fed controls our economy, and not the stock market. If the Fed didn't cut interest rates, the market would have been pissed off, and people would have lost money (but that would have meant more money for the government from taxes). Just like right now the market is looking for another rate cut...why? To makes themselves more richer, and for nothing else. The people who play the market are into getting rich...that's it. If you play the market, think as it like gambling...you can win or lose. Right now our economy is so f'ed up, that it's going to take years before we ever get back to having a surplus. In the meantime enjoy the high prices for gas, food, clothes, and everything else that goes with it.

[MTAtech]

The chickens have come home to roost.

[MegalosSkylaki]

Originally Posted by Outlaw2001it

Sorry I will have to disagree with you. The Fed's job is to support a strong dollar.

Hey, you're not disagree with me.
Except judging by the declining U$ Dollar, it's doing a lousy job.

The Fed is supposed to add (and subtract ) Liquidity --in other words easy or hard money --into or from the economy as needed. That's how it maintains a relatively stable currancy with, hopefully, low inflation.

It's job is nt to raise the Dow Jones avarage or to make Investors who are on the "long" side rich. It fact, much of the "smart money" and hedge funds are "selling short" -betting the Stock Market will go down.

What I said is that interest rates are set by supply and demand, confidence in the future worth of the Dollar etc.

In other words, the market economy sets interest rates, contrary to any efforts by the Fed. Look at Japan , where it dropped interest rate to almost negative territory --but the economy failed to respond-- or the Greenspan cuts that led to insane borrowing a housing bubble. The saying is " you can pull on a string, but you can't push on a string".

How does the Central bank create or destroy Money? For example, increasing or decreasing the percentage of assests that a Bank must maintain (not loan out).

Like I said, the Fed --and other Federal agencies like the SEC which can affect margin loan requirements to buy stock on credit can try to manipulate the Stock Market --and right now it wants to maintain a "feel-good" state of mind.

But the conception that it has the power to "se interest rates" --when the behaviour of investors to buy bonds and T-bills or withdraw money from them is the actual setter of interest rates -in other words, the market economy.

The Fed increases or withdraws LIQUIDITY --this is a polite way of saying it increase or decrease the Money supply.

Right now it has been increasing the money supply -partly to fund a major war as welll as other major spending projects and a tax cut for the rich. Jolly nice of them to do that --especially as we approach a major Election Year and the Party in White House picked the Chaiperson of Fed. I'm not (just) knocking the Party in power; I'm knocking both crummy Major parties, who play politics with our nation's future and the value of the Dolllar in your pocket and bank and future.

If the Fed had done its job, it would have raisd interest rates, which would have bought more foreign and domestic money into creditworthy bonds and and T-Bills.
As international money flows into the Dollar, its vallue goes up. Tough luck, though, for Super-rich financial Institutions. As it were, many small home owners --who got themselves in too deep --due to their own greed and belief that in the Fed Ponzi scheme they could buy a house (not a "home" to live ) and flip it over at a higher price.

Like in all Ponzi schemes, those who came to the party early may have made out well. Now we have idiots, who in a time of historic low interst rates, chose to take out an Adjustable house mortgage at a low "teaser" rate with the expectation a greater fool would come along and take the house of their hands at an even more outrageous price. Those who were watching the store were either too busy with their hands in the till, or were not about to rain on anybody's parade.

The Fed added more Liquidity --created money --to bail out the Super rich. In the meantime, the small investors might also tag allong a nd get some protection. But the same Finacial insitutions , faced with late payments (which are high) and defaulted payments (also high) has doubled the rate of foreclosures. It could have been worse.

Hence, your arguement just adds to mine. Except that you've bought into the erroneous notion that somehow the Fed can push on a string. The Market determines how much money is going into Loan-type investments, regardless of how much or little the Fed wants to strut its stuff.

The job of the Fed is to add/subtract Liquidity --Create or destroy money supply -- to maintain the value of the Dollar against both Inflation and Devaluation.

When it found itself --or rather helped place itself into a hole where it could choose to raise or lower short term or overnite rates-- it chose to play Politics rather than Economics. Wadda surprise ! So international flows of money are moving away from Dollar rather than to the Dollar and it continues to sink against the EURO and POUND. And also take down with it Latin American currancies --which, too, have a propensity to spend more than their Countries make.

The real problem is not the Fed though. That's beacuse --despite misconceptions to the contrary --the Fed really doesn't have that much power in an economy the size of the USA.

The problem is an Adminstration and a Congress, with both crummy Parties, spending more money than they can afford, and our making our Economy open to deliberately too weak currancy Communist China and other countries. We are exporting Both jobs and currancy, and Communist China, Japan, and South Korea --which have an interst in not letting their own currancies get too strong against the Dollar as it would hinder exports to USA have been buying up those T-Bills and private Notes. This has also given Communist China a "nuclear option" if we decide we are fed up with their practices -they can withdraw liquidity (i.e. not buy, roll over our loans denominated in Dollars such as T-Bills and royally screw us. In the immortal words of "Dirty Harry", Swell !

MegalosSkylaki

[outlaw2001it]

Yeah no S***...Swell!!! Living here in Greece off of my pension from the military, believe me I am seeing a downside to our economy. Lucky for me that I don't live in a high cost area. But however with the shrinking dollar a lot of companies in Europe are hurting. Exports are going no where in places like France, and Germany. Airbus is in a world of hurt because now it costs more to buy any of their planes compared to Boeing. Even though our exports are cheaper which is helping businesses state side, the downside of it is the prices of our imports. Gas is a major issue all over the world as far as the price goes, it's just as expensive here to buy gas as it is in the States. Until our dollar gain some significant ground we're going to be in a world of hurt for sometime to come.