The Fed's statement today

CC,

Lets think that through a little..

What did the move from last spring do to demand this trip? Demand has been squashed, of course that has to do with the credit markets too but I dont see how you can say 150% inflation when we are in a recession to boot? Recession equals higher unemployment, conservative consumers, less demand. I also think the overall consumer recession NOW is worse than last spring/summer and OIL inflation was due to futures manipulation and less to the supply/demand equation.

The only "real" government intervention in the markets has been around the toxic asset issue with these financial firms, the "stimulus" plan isnt really intervention..in times past during times of recession or just a general economic decline, the government spends more money and goes into more debt than during an expansion cycle..thats just basic econ theory there. So what other "intervention" has there been outside the banking issue?

Keep in mind that there was a choice to be made (we have discussed this) either bring down the leverage by removing the assets and try to lubricate the credit markets or grind the economy and banking system to a HALT..which do you think was better for the economy and the situation we faced? The government failed in its regulatory function so due to that failure there is responsibility and something HAD to happen, no way around it.

I just do not agree with your hyper inflation theory in the face of a recession. Inflationary periods in the past can be connected to other issues, usually protectionist policies or a failed monetary policy.

Show me a historic example of this scenario taking place and the end result? There isnt one..you cannot plug and play past scenaros into this and draw a conclusion based on different circumstances.

I dont see the dollar devaluing like some of you think, nor inflation running amuck without demand to fuel it.

Printing money = Dilution = Dollar worth less.

We are bankrupt.

In my opinion this is A controlled crashing of our economy to usher in A new world wide monetary policy to further enslave everyone.

Not to far fetched.

Check out these books.

Web of Debt

Confessions of an economic hitman.

150% inflation is a lock by 2014.  Were you part of the crowd that was saying Oil was going to hit $200 a short while ago?

And part of the crowd that was saying Dow 5000 is a lock before shit picks up?  Or the opposite end of the spectrum in Dow 36000 ten years ago??

Momentum is a crazy thing.  Just remember, things are NEVER as bad as they seem and NEVER as good as they seem.

 I don't think any objective observer can refute the notion that the Fed and the Congress has promoted "irresponsible" policies for decades We are watching the demise of the American Empire, and part of that demise is the demise of the dollar as reserve currency.Events, military, political and social of late have speeded up the crack up:


Because other nations continued to park their money in U.S. dollars, the argument goes, the Federal Reserve was able to pursue an irresponsible policy in recent years, keeping interest rates too low for too long and thereby helping to inflate a bubble in the housing market.

"The outbreak of the crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system," Mr. Zhou said. The increasing number and intensity of financial crises suggests "the costs of such a system to the world may have exceeded its benefits."

 Mr. Zhou isn't the first to make that argument. "The dollar reserve system is part of the problem," Joseph Stiglitz, the Columbia University economist, said in a speech in Shanghai last week, because it meant so much of the world's cash was funneled into the U.S. "We need a global reserve system," he said in the speech.

 Stiglitz is a man not to be dismissed lightly...

Vermeer,

I dont want to come off as some know-it-all but this talk from China reminds me of Hugo Chavez sour grapes when oil was ramping and he was bitching because the dollar was dragging the value of his oil down.

Everything is cyclical and I dont believe that this is the end of times and that the US is going to be taken over by the NWO (sorry CC but I dont) and the currency goes POOF into thin air, I also think there is an exit strategy, we are just in the middle of the mess and it is tough to see out past it.

These same people who are crying about how the USD anchors global currency reserves werent bitching about it when it HELPED them and when things were working correctly.

All this talk is just theorizing, the actual implementation of a global currency makeover is such a daunting task how could it happen in any short period of time and do they think the US is just going to sit there and let these other countries call the shots?

Wait until China has a reversal of fortune economically speaking because it WILL happen, not if but when, and they will come kicking and crying and begging for our backing when this mess is cleaned up and we are back to a more reasonable economic environment.

Sorry but I chose not to listen to bears as my only source of news and thought, and we have seen worse in this country and I think we will come out of this and be just fine given the time to digest this and process it and the cycle to begin to turn.

 The end of any one empire is NOT an "end of times." History is littered with empires that have, as empires always do, come to an end.Only an American would consider it as a catastrophe, because it is their empire, and they tend to think they are entitled to their success. Britain is still around and pretty damn important, and mossbacks there consider the end of their empire a disaster:not a view shared in India, for example.

  I think optimism is a wonderful trait. However, realism is a more estimable one.

  WSC, I respect your opinion, but do you seriously think the American experience is the one exception that proves the rule that all empires eventually end? That truly is classified in academia as "American exceptionalism", and that idea has been around for years (ie, the USA is chosen one of all nations, and previous history does not apply, as we are blessed, our destiny is manifest, blah blah blah).

  The British empire ended, it was not the "end of times", it was the passing of one empire (theirs) to ours. It was not the end of Britain.But it would have been if Churchill did not understand that fact, and had not acted on that estimation in 1939.Lend Lease was the result, and a dman good one.But their empire was over, Britain saved by fundamentally getting the fact that the US, not Britain, was the most important nation on earth at that time.

And now, after quite a nice run, but with immense military and socio- economic mistakes, we are present to see the passing of economic leadership from the US to China. That prospect is distasteful, but you have a nation with blown infrastructure, a destroyed  public school educational system, and endless and utterly fatuous military obligations, on top of promises to retirees impossible to meet. It is, sadly, so textbook that people deny its reality because it is so textbook...

 We have been in worse circumstances, yes. We will survice yes. But our days of dominance, economically, are rapidly ending. It is simpl a matter of time.
 
 

 


 
 

 

 
PS

 I am not stating a switch that will take place in a short period of time regarding currency...but a 21st century Bretton Woods is in the works,  count on it.Will it spell disaster? No more than Bretton Woods did.But it will change the way the world's economic system is determined.