�??We have never been experiencing such big pressure,�?? Mr Wen said, according to Reuters. �??We are worried about how to preserve the value of our reserves.�??
It is not logical that the Chinese will simply stand by while the value of their 1.3 trillion dollar reserve declines in value. Our Federal Reserve is trapped: raise rates to keep China in the dollar and cause a recession/depression, or lower rates to stimulate the economy, China bails on the dollar, and we get an inflationary recession/depression.
No choice but to raise rates. Bernanke never should have made the most recent cut anyways.
We can bite the bullet now or just put it off and make it worse. We do it now and I don’t believe it will not be all that bad, tech stocks are still doing great, inflation has stayed in check, and consumer spending is up and should stay that way through the holidays. The mortgage mess still has a ways to go, but at least banks are using a bit more discretion these days.
[quote]tedro wrote:
No choice but to raise rates. Bernanke never should have made the most recent cut anyways.
We can bite the bullet now or just put it off and make it worse. We do it now and I don’t believe it will be all that bad, tech stocks are still doing great, inflation has stayed in check, and consumer spending is up and should stay that way through the holidays. The mortgage mess still has a ways to go, but at least banks are using a bit more discretion these days.
I think there are jsut too many bears right now.[/quote]
The trouble is that its an election year. Raise the rates and the Dems will portray Republicans as baby killlers, haters of hard working Americans, and so on.
The Fed is really trapped here, unless they simply ignore politics.
[quote]LIFTICVSMAXIMVS wrote:
tedro wrote:
inflation has stayed in check
What is your definition of staying in check?[/quote]
That may have been bad wording on my part. I mean it is not increasing faster than average. I did not mean it has been 0%, if that’s what you interpreted.
The trouble is that its an election year. Raise the rates and the Dems will portray Republicans as baby killlers, haters of hard working Americans, and so on.
The Fed is really trapped here, unless they simply ignore politics.
[/quote]
You just had to throw politics into the mix and screw up everything, didn’t you?
The trouble is that its an election year. Raise the rates and the Dems will portray Republicans as baby killlers, haters of hard working Americans, and so on.
The Fed is really trapped here, unless they simply ignore politics.
You just had to throw politics into the mix and screw up everything, didn’t you?
[/quote]
Politicians are famous for that, aren’t they?
The danger of a mixed economy like ours is that politicians get blamed/rewarded for the state of the economy. They therefore opt to make things look good now, like a Potemkin Village, and just hope the shit doesn’t hit the fan on their watch.
[quote]tedro wrote:
LIFTICVSMAXIMVS wrote:
tedro wrote:
inflation has stayed in check
What is your definition of staying in check?
That may have been bad wording on my part. I mean it is not increasing faster than average. I did not mean it has been 0%, if that’s what you interpreted.[/quote]
Ask most economists about inflation, and they’ll tell you it’s low. Ask the average consumer, and you might get a very different answer.
Sean Taylor, 34, an information technology consultant in Trenton, N.J., ticks off the changes in his bills in the past nine years: property taxes, now $9,000 a year, up 105%; heating oil, $238, up 109%. His wife, Carrie, a state employee, pays $87 a month for health care; nine years ago, it was free. His income varies from year to year. Her salary is $75,000, up from $45,000, or 67%.