>Looks like investors don't believe there will be a rate cut, and there
>may not be one.
Couldn't tell by today's laughable "recovery"........Of course 1,000
points have gone down this "market's" throat under the guise of "hopes
for a rate cut," and the less likely the cut becomes, the more this
laughable "market" is "struggling to recover"........
The funniest part of it, is that the guise for this "struggle" is
"bargain hunting"......What a riot! "Bargain hunting" in a "market"
artificially overvalued by 30%........Hilarious!
*Normally* exchange rates, i.e., monetary policy, are the exclusive province
of the Treasury Department. The problem is that the Fed also understands
that in extraordinary times its domain, interest rates and economic policy,
impacts the exchange rates. The Fed also knows that extreme devaluation is
the first step to extreme inflation a year or two down the road. At least
that has been true since the 1970s.
And therein lies the problem. If the Administration simply had the policy
of taxing the people to conduct war, devaluation would not be necessary and
the Fed would do what the Fed normally does which is to bring about a
goldilocks economic scenario by real actions and real adjustments instead of
playing cosmetic games what-looks-good-on-CNBC games.
And that's all I want to say about this, except the Fed is currently
helpless. Thank you, gamblers in the West Wing.
Isn't it amazing how the biggest hawks on war are also the ones who refuse
to pay for it but want those who haven't even been born to pay for it with
interest.
--
Lubow
Fred
"lubow" <lu...@lubow-industries.com> wrote in message
news:N8mFi.2647$BL3.434@trndny01...
How does devaluation bring about extreme inflation? A devalued dollar means
imports are cheaper which helps lower inflation. Help me here. Thanks.
704set
I think you mean a devalued dollar makes imports tend to be more
expensive. You must not have had your coffee yet this morning.
I'm sorry to say your "assets" and "income" analogue stem from Reagan
trickle down logic. It's nonsense because the USA is not Czarist
Russia. The Federal government does not own everyone and everything.
Like any other entity, the government owns what it purchases or
confiscates. It's revenue is what it draws from in taxation and sale
of products and assets. Nothing more. And right now it's showing one
huge loss which is currently manifested in the exchange rates. But if
history of the last 37 years is any barometer, falling USD valuation
leads inflation by a couple of years just as increased USD valuation
led to the goldilocks economy of the latter 1990s.
The argument that debt should be measured as a percentage of GDP is
just another vestige of the failed trickle down logic that Kudlow the
drug addict enunciates. It's the logic that gave us the worst
recession since the 1930s during the Bush 41 Administration. For some
crazy reason "supply siders," i.e., trickle down enthusiasts, equated
debt as a percentage of GDP. Why GDP? Why not the rainfall in Las
Vegas?
They both make just as much sense. Such a ratio had never been used
previous to the Reagan Administration to justify extreme indebtedness
and for good reason. The reason is that debt has to be repaid no
matter what percentage of anything it is. That's the logic that made
Bush 41 a one term president.
When Clinton entered office on 1/20/1993 the CAD was $0.79. The CAD
on 1/20/2001 was $0.66. Now it's around $0.95. Fred, you can
certainly live in a world of overloaded government debt, unfinanced
war and mortgage defaults. I'll take a tech bubble and a stained blue
dress over that anytime.
Lubow.
So $3 gasoline has nothing to do with inflation?
First examine your premise. Are imports cheaper if the dollar buys
fewer euros or Canadian dollars?
Suppose you are Baron Rothschild and you are selling your champagne to
a liquor store in Brooklyn. You want euros for your champagne. It
now takes about $1.30 to buy one euro. Six years ago, it took $0.87
to buy one euro. If it takes the same number of euros now to buy the
same one liter of champagne as it did in 2001, was Rothschild's
champagne cheaper in 2001 or is it cheaper now?
Now, suppose you are an Arab sheikh with oil to sell and you want
euros for your crude. Do you think a gallon of gasoline is cheaper
now or was it cheaper when 87 cents bought you one euro?
Of course not...Neither does soaring prices in every other part of the
economy, from hard goods to groceries.....
There's no inflation...Have you lost your cotton picking mind??? 8)
You have it backwards. Foreigners can buy our stuff cheaper. Stuff we
buy from foreigners whose currency has appreciated relative to ours is
more expensive. It is not too bad as long as tourism increases, we get
some of it back.
Fred
Borrow when interest rates are low or reasonable and reduce debt when
interest rates are high. Just seems like plain common sense. Quite
frankly I think both Clinton and Bush admins did the right thing for
what was going on at the time. Amazingly you would think it would have
been swapped around. But good for us that it wasn't. The US is really
in pretty good shape no matter what anyone says. We will even kick ass
in a recession. ;-)
Fred
"Lubow" <dynami...@hotmail.com> wrote in message
news:1189519402.1...@w3g2000hsg.googlegroups.com...
> The reason is that debt has to be repaid no
> matter what percentage of anything it is.
Oh really? Fact is, the US has been successfully increasing debt almost
constantly since 1845.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo2.htm
I guess 162 years isn't long enough for you to catch on.
Yep, most people miss this important fact. ;-) The US is so good and
productive that we could take on another 1 or 2 trillion in low interest
debt with no problem. Face it; we kick ass and will always kick ass.
And now-a-days, the rest of the world is catching on and they are
starting to kick ass also. What could be better? The whole world is
kicking ass and being productive.
Fred
Btw. Everyone of YOU presents an acceptable case from YOUR viewpoint.
--Lubow
Reagan handed Bush 41 a huge debt. It was so "successful" that the
people gave Bush 41 his walking papers.
Want some more successes? Does a ten year bear market starting from
the day after the Dow closed above 1000 for the first time constitute
your idea of a "success."
I guess 34 years isn't long enough for you to catch on.
On Sep 11, 1:47 pm, Dr Tormento <re...@togroup.com> wrote:
> Lubow<dynamitem...@hotmail.com> wrote in news:1189519402.143704.179520
> @w3g2000hsg.googlegroups.com:
>
> > The reason is that debt has to be repaid no
> > matter what percentage of anything it is.
>
> Oh really? Fact is, the US has been successfully increasing debt almost
> constantly since 1845.
>
> http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo...
>Does a ten year bear market starting from
> the day after the Dow closed above 1000 for the first time constitute
> your idea of a "success."
You are absolutely insane. There was no ten year bear market. The Dow
peaked at 1000 in 1973, fell to the 500s 1n 1974, and then rose to the
1200s by 1983. That's more than a double in 9 years.
Fred
"BrunoR" <Bru...@nyc.rr.com> wrote in message
news:46e6ef97$0$15400$4c36...@roadrunner.com...
Yup. Needed my coffee. Thanks.
704set
--
Lubow
"Dr Tormento" <re...@togroup.com> wrote in message
news:Xns99A88F3C25B...@69.28.173.184...
> We no longer adjust for inflation when we compare the Dow over a ten
> year period?
No, we don't. The return on an investment is dictated by the change in
price only. But even if we did, the cost of living did not double over that
9 year period, so it was clearly a net gain anyway.
There was no 10 year cyclical bear market. But secular bear markets are
longer.
http://www.gold-eagle.com/editorials_01/alexander032101.html
704set
I did have it backwards. Mea Culpa.
704set
In between there was double digit inflation, 20% prime.
To you that's a bull market. To me, that's a bear market.
lubow.
=========================
On Sep 12, 2:49 am, Dr Tormento <re...@togroup.com> wrote:
> "lubow" <lu...@lubow-industries.com> wrote innews:TIGFi.3688$yf3.1964@trndny06:
--Lubow
>
> There was no 10 year cyclical bear market. But secular bear markets are
> longer.
>
> http://www.gold-eagle.com/editorials_01/alexander032101.html
>
> 704set
I don't accept the concept of secular markets, because the time frames
are open ended and undefined. If a big meteor hits in 2025, sending the Dow
down to 400, we could claim a 50 year secular bear market. Not buying that.
good