Lets stop talking about bailouts and start talking about....Interest rates!!!

Discussion in 'Economics' started by peilthetraveler, Sep 22, 2008.

  1. So now that the government is taking on all the bad debt, it seems a pretty safe bet that they are going to start jacking up the fed rate, right? I mean, now they got NO reason to keep it so low, right? They will start working on inflation by raising rates and we will see oil, gold and the euro get hammered down where they need to be.
  2. The Fed's toys are broken. They are impotent against true corrections such as this. Their printing presses produce the inflation you refer to.
  3. rally into elections then the mother of all drops
  4. Agreed.
  5. nah...they are just playing with their new bailout toy right now. In a little while we will see interest rates go up and then again the next month and again and again and we'll get interest rates up to 1980s levels. It would be nice to get a 7% interest rate again on my regular savings account :)
  6. They won't increase rates on the short end. Competitive currency devaluation is planned. Negative real interest rates are part of the design. Only when currency reaches an appropriate target will rates be hiked sky high to reverse the currency decline.

    WE are the carry trade.
  7. yeah and another thing i want to add, the government will likely come out next 2-4 days with a speech, televised saying "our markets have never been btr" blabla bla bla reassuring investors, saying a lot of bullshit.

    The stocks will rally off that (if they don't rally of that then they will rally off the fact that the bailout is inflationary) Fed will start tightening to fight it there will be a buying frenzy right before the plunge just like alot of other crashes over the last 100 years.

    OR this whole bailout will be deflationary as i have read in some bloomberg reports comparing this bailout to what happened in Japan, at this point i don't know I'm not smart enough to predict the future.

    But i stand by my prediction that the government will do everything it can to stabilize the markets pre-election.
  8. Look for a return to the peanut farmer's era... 21% interest, and this time, with much stiffer requirements. Good news for owners who want to finance sales!
  9. and the sad thing is the average person on the street will be like "boy are the banks nice these days, they're giving me nice big fat interest rate yeehawwww" :) :) :) :)