Do you think the Fed will ever raise rates?

I don't think they can. If they do real estate will be even more under water.

The average 30 year fixed rate is about 8%. Right now we are about 4.5-5%.

Inflation is rising and needs to be stopped. Rates need to go up. Commodities like Gold and Oil need to be corrected.

The Fed is trapped in the middle if rates go up...real estate and banking will be in even more despair. If rates stay low inflation will get even more out of control.

What will the Fed do??

 

There is not one damn thing they can do. All the propaganda about withdrawing liquidity at the proper time is just that, propaganda.

These problems will have to be addressed through the legislative arena by cutting spending and passing legislation to enable capital formation to once again jump start tax revenues through increased economic activity. The situation is already dire, and the Fed is gambling with the treasury market. US financial position is in no better shape than Europe.

 

Rates been near 0% in japan for last 15 years

 

Government stats reports there is no inflation!! Ask the seniors when was the last time they received an increase on their social security checks due to inflation.

 

CPI excludes Energy and Food. What a joke!

 

Wage inflation is "limited".

 

the continued rise of the US$ suggests yes

 

"Wage inflation" has a long lag time... not to mention the competition from Chindia and our huge pool of unemployed workers.

The Fed says, "the only inflation that matters is wage inflation", so regardless of how high food, energy, clothes, taxes, and services rise... the Fed can point to "stagnant wages" and the absence of a "wage and prices inflationary spiral" as the indicator of "no inflation".

 

How is this a joke. Those two sectors are heavily influenced by external demand and thus are poor indications of inflation due to FED intervention. They don't want to know how much prices are increasing because of expanding demand in the developing world. They want to know how much their policies and US economic factors are affecting inflation. IMO it seems like a reasonable concept.

 

they will do what nearly every 3rd world country central bank does. they will do what their political masters tell them to do. the fed is not independent. their answer will be inflate while telling the american public inflation is a good thing. it will be painless. they have already convinced some ET posters that deflation is the devil reincarnate