Edited by SemiBizz, 21 September 2008 - 02:19 PM.
What if Interest Rates Stay Low? (Thinking out of the box)
Started by
SemiBizz
, Sep 21 2008 02:18 PM
19 replies to this topic
#1
SemiBizz
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Posted 21 September 2008 - 02:18 PM
Sure seems like virtually EVERYONE believes that the bailout will result in hyperinflation and HIGHER RATES. What if the revitalized banks maintain rates or lower them? With the bank balance sheets in good shape, they will be back to trying to attract new borrowers, wouldn't they?
And what if? the government just doubled down on public spending on something like a war or a massive alternative energy program, or a public works infrastructure revitalization program...
I mean as long as we're talking TRILLIONS $$ now, Once you get over the shock of a $TRILLION, what's to stop the government from just blowing up an entirely bigger bubble?
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Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
http://twitter.com/VolumeDynamics http://parler.com/Volumedynamics
#2
pdx5
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Posted 21 September 2008 - 02:29 PM
There are only TWO ways the Treasury can handle the $450 Billion projected deficit for
fiscal 2009 + $700 Billion bank bailout . Either borrow from China/OPEC or print money. The
annual interest paid out EACH YEAR to service national debt is fast approaching half a TRILLION $$$.
I believe Treasury will go mostly towards cranking the printing machines. Does any one recall any
period in last 100 years when high inflation was accompanied by roaring bull markets?
Edited by pdx5, 21 September 2008 - 02:32 PM.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#3
SemiBizz
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Posted 21 September 2008 - 03:18 PM
Well, If I am not mistaken, WW II was financed on some pretty low interest rates wasn't it? Along with Emergency Price Controls... What the heck? We've had emergency everything else, why not this?
Price and Volume Forensics Specialist
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
http://twitter.com/VolumeDynamics http://parler.com/Volumedynamics
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
http://twitter.com/VolumeDynamics http://parler.com/Volumedynamics
#4
pdx5
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Posted 21 September 2008 - 03:27 PM
Well, If I am not mistaken, WW II was financed on some pretty low interest rates wasn't it? Along with Emergency Price Controls... What the heck? We've had emergency everything else, why not this?
I am sure you are correct about the interest rates during WW II.
However there are some differences. After the WWII was over, the only country left standing
was United States. Germany & Japan were bombed out. England was in shambles. China,
India & South America had no industry to speak of.
Now, circa 2008, China & India have 2300 Million people with growing industrial base,
Russia has tons of oil money and a growing demand for material goods, Brazil is booming,
along with so many other smaller countries.
It is difficult to visualize demand for commodities staying weak. Translation? Inflation!
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#5
SemiBizz
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Posted 21 September 2008 - 03:33 PM
Well, if you see the US$ suddenly climbing for no reason, get your fallout shelter ready...
Price and Volume Forensics Specialist
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
http://twitter.com/VolumeDynamics http://parler.com/Volumedynamics
Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"
Volume is the only vote that matters... the ultimate sentiment poll.
http://twitter.com/VolumeDynamics http://parler.com/Volumedynamics
#6
U.F.O.
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Posted 21 September 2008 - 03:43 PM
Interest rates will stay low as we're about to enter a deep recession, worldwide, that will probably last for 2-3 years. If that's the worst that happens as a result of this crisis, we'll have escaped a rather large bullet.
U.F.O.
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#7
pdx5
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Posted 21 September 2008 - 03:53 PM
Interest rates will stay low as we're about to enter a deep recession, worldwide, that will probably last for 2-3 years. If that's the worst that happens as a result of this crisis, we'll have escaped a rather large bullet.
U.F.O.
That is exactly what I am hoping will happen. But our politicians might find a way
to mess up things more than is necessary, that is my fear.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#8
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Posted 21 September 2008 - 03:58 PM
Your fear is well founded pdx5. The mental asylum patients have the key to the car.
U.F.O.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~
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#9
ed rader
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Posted 21 September 2008 - 04:16 PM
Well, if you see the US$ suddenly climbing for no reason, get your fallout shelter ready...
the dollar will climb because the rest of the world will soon be in recession, and the strong dollar will hurt u.s. businesses. we're looking at higher taxes no matter who gets elected and the consumer will soon be broken which will in turn spark the big lay-offs.
and $700T is just the beginning .... much more money will be required and as long as congress keeps the cash flowing we have a chance for a multi-year recession instead of a depression. that's my FF
.ed rader
#10
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Posted 21 September 2008 - 04:22 PM
Right you are, ed rader. 700BB is the downpayment. However, I will say if the US GOVT continues to take large equity stakes (remember AIG is 79%) they actually do have a chance to recoup a big chunk of the bail-out outlay. That was one of the failures of RTC in 1989. The GOVT took all the risk and didn't demand a bigger share of the asset sales' profits until late in the game.
U.F.O.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~
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