patrick.net

How about a house ;-)

Housing will go under anyway, because the Fed can't control mortgage rates directly, and there is no secondary market for mortgages anymore.

So we will still have a lot of fun watching the all the mortgage resets roll around. We'll just have to pay a lot more for our beer while we watch...

Patrick

Damn, I need an inflation hedge quick.

O Canada.

Not investment advice.

Gold is doing pretty well lately. Pulp-paper futures should perform well too, since FED will need a lot of paper to print dollars now...

Ben is a weenie!!

I hope the whole damn thing crashes and burns....

I can survive on schedenfraude.

since FED will need a lot of paper to print dollars now

How about HP? They sell ink, right? ;)

>>Pulp-paper futures should perform well too, since FED will need a lot of paper to print dollars now…

Dollars are printed on cotton - not dead trees.

Neither China nor Japan own dollars as an investment vehicle. The Central Bank in neither of those countries is aiming for a decent rate of return, they are aiming for overall currency and political stability.

Having said that, if their returns are too negative for too long, they may grow tired of holding only dollars. Hasn't China already said that they are officially diversifying into other currencies? This only makes sense, considering they do more trade with the EU now than with the US.

Cotton....its whats for dinner.

Maybe they should outsource dollar printing to China and save a bundle in transportation costs :)

Seriously though, one either should invest into something that big wall street crooks who hold the FED's balls bet on, hoping to get some breadcrumbs of their table or into something that our idiotic government can neither produce (print) or f&@k up - gold, silver, land or house - if they weren't already overpriced.

But then again, what does 'overpriced' mean when government can print as much money as it wants - costs more then the ink and paper needed to print enough money to buy it? Oh, I forgot to add the printing labor costs as well, hopefully with the eventual passage of "comprehensive immigration reform" labor costs are not going to be an issue.

O Canada

You mean the currency or the land? Or just move there? With global warming, there is a double incentive to buy Canadian.

CoutryWide is the way to go with gamble-able bucks

You think Countrywide stock will recover, or will plummet further?

House will go under, because house is dependent on income, and money printing doesn't necessarily sprinkle money evenly across all sectors. Whenever the Fed prints, the Wall Street gets the majority of it, leaving little for the rest of us.

Also, banks who got saved don't necessarily want to lend money out as aggressively as before because the pool of foreign buyers for CDO and MBS has dried up. We can't force Japan and China to buy our trash papers.

No matter how much they print, housing is doomed, it is just a matter of dying over a couple of years or over a decade. It looks like we may have to go through a prolonged ZIRP period like Japan.

[posted this on the previous topic, but it is more relevant to this one.]

Given the slide in the dollar so far, the question is whether it is now too late to completely ditch the dollar and convert everything I have into SFR?

SP

I guess the million Mercedes March worked!!

http://tinyurl.com/29bl7c

"Bernanke has no idea! He has no idea!"

SP

Remember when unemployment under 5% was called full employment and $40 oil would sink our economy?

Oil = $ 82

Gold = $ 730

Wheat = $ 9.00

Heaven help us!!!

Oh, btw unemployment is still 4.6% according to BLS

I guess the million Mercedes March worked!!

Any worthy hedge fund manager can devise strategies to exploit every scenario.

I don't hear Soros crying for intervention.

Oh, btw unemployment is still 4.6% according to BLS

And core inflation is still around 2%.

Don't worry. Be happy. Drink your kool-aid.

Damn, I need an inflation hedge quick.

guns
ammo
and gold!

Why can't I get italics to turn off??

Homer says - ummm, I love kool-aid!

SP,

what do you think the US has done so far to change the direction of its currency? I need to see a move or two to indicate that we are a responsible entity doing everything we can to uphold the integrity of our green paper. I think most foreigners look at USD the same way I do.

Having said that, it also depends on whether Euro will follow suit. If Euro also comes in with a substantial rate cut, then USD may find some support soon, if the other currencies hold their interest rate constant, we are in for another round of drop.

The dollar is down... And some think this is bad... now our goods will be more competitive overseas, and foreign goods will be less competitive here. So our trade deficit will decline and our employment will rise.

Of course import prices will also go up a little. However, with foreign trade being about 15% of our economy the total effect is greatly diminished. So with the dollar down by about one half of one percent the impact on inflation will be a brief and insignificant (less than 0.1%).

Largest import is CRUDE OIL

Of course import prices will also go up a little.

What is so nice about crude oil is that it's price increases does not flow through or feed into the price of other products or services!?! HAHA

I guess if my gold goes up and rent stays the same I am still doing alright!

Patrick you said: "I assume the Chinese and Japanese are pretty annoyed, given that the value of their US Treasury holdings just fell by, oh, a trillion or two."

Losing more than one trillion is quite difficult given that China and Japan collectively hold only have a bit more than one trillion of our debt to start with. If we do the math we see that a one half percent reduction in the value of the dollar reduces the value of their holdings by about $5 billion.

Peter P,

Did Bernanke send out the kool-aid ration with this rate cut? I didn't get mine!?!

Paul

Such an uncanny resemblance between US and Land of Oz. We used to have just Scarecrow without brain and Tin man without hart and now we just got the Lion without guts. Maybe we all need to have a little more faith in our government. In Big Government We Trust.

Paul, nearly all goods and services are also inputs to other things - but on a fractional/diminished basis. The price of oil often fluctuates daily by as much or more than the amount by which the dollar just declined. It is good to understand the contrext of things so as to not grossly overestimate their impact.

Of course the dollar could decline further, but it could also strengthen on secondary considerations.

It is just a few raindrops - the sky is not falling...

In fact it is quite the contrary - a little rain is a good thing.

You mean the currency or the land? Or just move there? With global warming, there is a double incentive to buy Canadian.

Hey Idaho is just south of the Canuks....another reason I moved here after bailing out of my San Jose house in 2006. Should warm up and get wetter here over the next few decades.

Invest in guns and ammo. A type III Federal Firearms License is still only $30 for 3 years. You can purchase Mosin Nagants and Mausers for $100 or so and tins of ammo for same from east bloc countries for really cheap. Turk 8mm Mauser ammo or 7.62 x 54R ammo from Albania is only a few pennies a round.

1982 oil, adjusted for inflation today would equal $100/barrel.

If rates didn't get cut, more damage would be done by the increase of foreclosures on the economy which would shrink lending and contract consumption - which accounts for 70% of GDP. Although, I do agree that we are bailing out the bad with the good, it needs to be done.

BTW, foreign investors hold Treasurys not fed funds, so the Fed Funds rate reduction does not reduce their interest rate earnings. In fact, the 10 year Treasury rate went up today, so they will now earn (slightly) more interest on new bond purchases. So looking forward, lending to the US just got better.

Deep shit my ass.... The total effect of all these things is not only not significant, it is barely measurable.

Check out the bargains here: www.aimsurplus.com

"...Invest in guns and ammo. ..." and they are not making any more of old Russian ruffles, just like land...

Zephyr,

10 (1999) to 82 (Now) is a trend not an aberation or vol!

Today patrick.net community lost agains FED ... what is your option now. Would you recommend Peter Schiff europac.net?

Hey John,

It will not be long and you will get your inflation adjusted crude at $100. It's great we are all ok with lost purchasing power and feel the need to justify / adjust for inflation.

Paul