Stunning flight from the dollar.

[GoUSC]

These are some really stunning numbers. On one hand this will help make our products much more competitive. On the other hand, how are we going to finance our deficit?

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/16/bcnchina116.xml

[patientlywaiting]

Do you guys think this will lead to higher mortgage rates which will futher tank real estate?

[patientlywaiting]

Do you guys think this will lead to higher mortgage rates which will futher tank real estate?

[HereWeGo]

Actually, the dollar is fairly stable against most currencies at this time, except the Loonie. It now 1.02 or so to buy a Loonie.

[HereWeGo]

Actually, the dollar is fairly stable against most currencies at this time, except the Loonie. It now 1.02 or so to buy a Loonie.

[4plexowner]

the Fed and its banking cartel are caught in a box canyon

they need to raise interest rates so foreigners continue to invest in US debt (oops, I mean securities) but raising rates drives a silver stake through the heart of the real estate market, American consumer and American economy

lowering rates to support the real estate market increases the speed at which foreigners say ‘sayonara, baby!’ to the US dollar, US treasuries and any investment priced in US dollars

the best strategy for the cartel to employ in this situation is to use talk (also known as bullshit), subterfuge, delay tactics and distractions but NOT to actually change rates in either direction – the recent cut of 50 basis points indicates how weak the Fed’s position is at this point

~

Paul Volker raised interest rates to 18 or 20% in the late 1980s – that is what is needed now but isn’t likely to happen

[4plexowner]

the Fed and its banking cartel are caught in a box canyon

they need to raise interest rates so foreigners continue to invest in US debt (oops, I mean securities) but raising rates drives a silver stake through the heart of the real estate market, American consumer and American economy

lowering rates to support the real estate market increases the speed at which foreigners say ‘sayonara, baby!’ to the US dollar, US treasuries and any investment priced in US dollars

the best strategy for the cartel to employ in this situation is to use talk (also known as bullshit), subterfuge, delay tactics and distractions but NOT to actually change rates in either direction – the recent cut of 50 basis points indicates how weak the Fed’s position is at this point

~

Paul Volker raised interest rates to 18 or 20% in the late 1980s – that is what is needed now but isn’t likely to happen

[GoUSC]

There will be pressure on the dollar if this continues. The fact is that the return on US investments isn’t in line with the quality. There are cracks in our economy and investors see it. The FED cannot lower rates further…or the market will continue to dump dollars.

A lot of us knew this was coming but this amount is pretty staggering for one month.

[GoUSC]

There will be pressure on the dollar if this continues. The fact is that the return on US investments isn’t in line with the quality. There are cracks in our economy and investors see it. The FED cannot lower rates further…or the market will continue to dump dollars.

A lot of us knew this was coming but this amount is pretty staggering for one month.

[nostradamus]

Yes, the dollar is very stable, nicely maintaining a record low against the euro, dinar, pound, rupee, shekel… oh yes the loonie.

[nostradamus]

Yes, the dollar is very stable, nicely maintaining a record low against the euro, dinar, pound, rupee, shekel… oh yes the loonie.

[GoUSC]

Regarding raising interest rates to 18 or 20%, how could we do this? We have so much debt outstanding would this create a balance of payments risk (ie we don’t take in enough revenue to pay our debt service)?

[GoUSC]

Regarding raising interest rates to 18 or 20%, how could we do this? We have so much debt outstanding would this create a balance of payments risk (ie we don’t take in enough revenue to pay our debt service)?

[patientlywaiting]

That is the big question radelow. I read an article by an economist who calculated that our current income stream is not enough to service the debt as it is. Appreciation is what we are counting on and we are pushing the debt service further into the future.

[patientlywaiting]

That is the big question radelow. I read an article by an economist who calculated that our current income stream is not enough to service the debt as it is. Appreciation is what we are counting on and we are pushing the debt service further into the future.

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