Does everyone agree that when this bailout bill passes the dollar crashes and commodities skyrocket? Why or why not? Thanks!
At this point its tough to say where commodities or the USD is headed, at this point is all a guessing game.
I suspected intervention back when the dollar turned. Folks on here said "If there was US Gov't intervention it would be done by FRBNY and they would disclose it." I just don't trust T-Dept or FRB or GW at this point. I believe there is intervention.
Internationally everyone is running to T's. Yeild are very low. Means $$ are comming off the market in a big way. It wants to counter act the bailout, hard to tell where it will end.
It is common for market makers to run instruments in the opposite direction of the fundamental on news. Let's see where we get an equilibrium on this dollar and from there, where everything else goes.
Right now dollars are coming out of the market and into treasuries and the Treasury, debt is going out. In the final analysis, however, i'd be rather shocked if this bailout, entirely with borrowed money, and our two populist and insane war's fought with borrowed money, do not lead to severe inflation in the short run. In the face of a deep recession, i don't think the fed will be able to boost rates enough to cool inflation much. Outsized deficits on top of a deep recession create a very difficult situation. There is no painless solution. But eventually the government should recover most of the bailout money. Let's hope they can recover the interest also.
And i should have added that these absurd deficits must be brought under control, and that means deep cuts in "defense" spending.