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249 comments on DrumBeat: September 18, 2007

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PeakTO on September 18, 2007 - 10:05am Permalink | Subthread | Parent | Comments top

Nice sentiment...but he has masters too.

There is no correct move anymore...raise it and it will destroy the markets and the credit/debt market...lower it and insure a rapid demise of the USD.

He is well documented about inflating things away...bad things.

So he will reduce the rates (not much) and print money like mad. Lots and lots of money.

To buy lots of worthless paper with...er...I guess it is a fair exchange after all.

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PeakTO on September 18, 2007 - 2:19pm Permalink | Subthread | Parent | Comments top

World Economy at `Scariest Point Since Depression,' Says Penner

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5I2qVjiG_Ow&refer=h...

The U.S. housing market is an ``unmitigated disaster'' and will take at least another 18 months to recover, as the U.S. Federal Reserve and European Central Bank respond to turmoil in credit markets, Penner said. As foreclosures rise, lenders will try to sell the properties they acquire at depressed prices, dragging the market down further, he said.

``The effect that's going to have on the economy is sure to be bad,'' Penner said. ``I don't think we're going to have a depression-like situation, but we are going to print a lot of money, and that's going to have its consequences. The price we will pay as a society to avoid depression is high inflation.''
-snip-
``It's good at this time to be a guy with no balance sheet,'' he said today

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PeakTO on September 18, 2007 - 2:22pm Permalink | Subthread | Parent | Comments top

WHOA... HALF POINT

http://www.bloomberg.com/apps/news?pid=20601087&sid=aV.iQCJeskKU&refer=h...

``Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time,'' the statement said.

That ain't no good...panic anyone?!

Crap!

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PeakTO on September 18, 2007 - 2:26pm Permalink | Subthread | Parent | Comments top

Hehe...look at the market after the announcement...spike up

http://finance.google.ca/finance?cid=983582

(hope this link works)

Everyone's happy.

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musashi on September 18, 2007 - 2:28pm Permalink | Subthread | Parent | Comments top

At some point, when someone is too much of a sack of sh*t, you bury them.

Lets see what happens to the U$S now.

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LevinK on September 18, 2007 - 2:35pm Permalink | Subthread | Parent | Comments top

It went down one cent for just 5 minutes after 2.15. I think it will hit 1.40 today.

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musashi on September 18, 2007 - 6:54pm Permalink | Subthread | Parent | Comments top

U$S dollira ?

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LevinK on September 18, 2007 - 2:30pm Permalink | Subthread | Parent | Comments top

Got help us. I'm off to find a good wheelbarrow while they are still less than million.

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Cid Yama on September 18, 2007 - 3:21pm Permalink | Subthread | Parent | Comments top

I'm flexible ;)

BAILOUT!: The Fed Caves to Pressure from White House and US Financial Markets

The Fed announced Tuesday that it was reducing its target for the federal funds rate, the interest that banks charge each other, from 5.25 percent to 4.75 percent.
In addition to cutting the federal funds rate by a half point, the central bank also reduced its discount rate, the interest it charges in making direct loans to banks, by a half-point as well.

Former Federal Reserve Chairman Alan Greenspan has sharply criticized President George W. Bush's administration and Republican congressional leaders for putting political imperatives ahead of sound economic policies.

Bernanke and the Fed just proved to the rest of the world they are NOT serious about addressing the problem of the US Dollar. If the US and the Fed will not address the problem, the world will address the problem to the detriment of the United States.

http://cid-yama.livejournal.com/38614.html

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Spaceman on September 18, 2007 - 3:57pm Permalink | Subthread | Parent | Comments top

Marc Faber on Bloomberg today said a rate cut would be "suicidal" and "you cannot cure a condition by the same thing that caused it".
Are we looking at hyper-inflation? What kind of time frame?

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Cid Yama on September 18, 2007 - 4:21pm Permalink | Subthread | Parent | Comments top

Hyperinflation - Wikipedia


Inflation 1923-24: A German woman feeding a stove with currency notes, which burn longer than the amount of firewood they can buy.

http://en.wikipedia.org/wiki/Hyperinflation

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ilargi on September 18, 2007 - 5:33pm Permalink | Subthread | Parent | Comments top

Are we looking at hyper-inflation?

No, we are not.

The Fed continues its gutting of the US economy according to plan, but inflation is not the way to do it. And as Mish explained earlier this week in Is the U.S. printing money like mad?, the printing presses are not anywhere near full speed.

The M3 increase comes from keystroke created money, not printing presses. Much of it will soon be gone, through losses in home values, stocks and derivatives. And you can't have inflation while most of the money vanishes from your economy, let alone hyperinflation.

The rate cut will further devalue the dollar, but the Fed will not make up the difference. The average American will simply have less money to spend.

We will have deflation.

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Cid Yama on September 18, 2007 - 5:53pm Permalink | Subthread | Parent | Comments top

End Game: Hyperinflation
by Robert Blumen

I previously contributed to this debate with an editorial on the so-called Dollar Short Squeeze theory. In the current piece, I will take on what I consider a few of the errors and more questionable arguments that have been appearing from the deflation side.

http://www.lewrockwell.com/blumen/blumen6.html

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710 on September 18, 2007 - 6:13pm Permalink | Subthread | Parent | Comments top

We will have deflation to the extent that lowering stock and home values and credit defaults cause the money supply to shrink as money essentially disappears from the economy.

BUT, we will have inflation to the extent that governments attempt to print their way out of the mess we're in AND as declining primary energy causes a contraction of the producible goods and services in relation to a given supply of money.

I think in this case the irresistible force of inflation will win out over the immovable object of defaults and declining market values.

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memmel on September 19, 2007 - 12:09am Permalink | Subthread | Parent | Comments top

Its a bit funny in a sense. The timing of peak oil and rate of decline will determine when peak oil destroys our economy. The financial games joust to either destroy us with hyper-inflation or deflations are just plain broke no matter how you denominate it. And global warming threatens both oil supply and crops with the population straining all resources.

Maybe I'm a nut and I hope some of our writings survive since I think historians will find the battle over how the oil economy ended funny.

We are toast but is it burnt toast and are we going to land butter side up ?

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PartyGuy on September 18, 2007 - 5:43pm Permalink | Subthread | Parent | Comments top

We are so screwed. Seriously.

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