mave said what i think, but in the longer view, massive economic earthquakes usually leads to war for whatever reason, WWI, WWII..as examples.... a population that gets really hungry and angry morphs into dictatorship.... Adolph wrote about this....
There's stupid, and then there's ET stupid. Another one on the ignore list. Its getting so that I pull up a thread and there are page and pages of nothing, better than pages and pages of inane drivel though to get to a post that makes sense from a reasonable person such as those by AustinP in this thread.
As I do not agree with the "Rate Cuts" however, you can not argue with the FED. This is the first of many cuts (Remember Greenspan). As long as you are not keeping "US Currency" in your savings accounts or CD's, or any excess capital you have on the side lines, you will be fine. The global markets and economy are healthy for the most part. The US currency will be replaced as a leader. The US economy is weak but there are plenty other areas to roll profits into. VIX is still 20 or so. Volatility is going to be back in a few days. Great trading ranges of 100 to 300 point swings. For traders, this will be a great year. However, if you are working a 9 to 5 and "Fixed" on income. Your fucked. Dollar will continue to slide as so will your net worth, hourly pay. Inflation will eat away at your "weekly" savings that you hold in US dollars and you can't do much with your 401k except watch it on ur "Screen" at work. The averag joe and sally are screwed. Lower rates will not effect credit cards for months, so the 9 to 5 crew will not be able to receive new credit at lower rates, to transfer balances. We could have one more round of "Refi's" from the Home piggy bank. However, most will be upside down in their homes in a few years. Punching a clock will be a ticked to the poor house.
that's true. fed policy has an asymmetrical effect on ordinary people the systemic problem will only get worse unchecked. it really comes down to whether you care more about your present or your future (especially that of your kids). people are scared of difficult change but they shouldn't be. that's even the original american way the monetary and fiscal policies of this country need fundamental reform, the sooner the better. it's simple to see, and not the exclusive domain of econometric genius if our defecits didn't have such strong redistributive effects domestically, perpetual print and spend might be more sustainable... but unfortunately it's an inherently unsustainable policy with asymmetrical effects on our society
Thats the same mindset I have. I don't care if the cut was too large from an econ standpoint. As long as Im making money who cares.
Either way, a certain class benefits from the rate cut while the rest still lose out, just slower. Eventually, someone has to face the music, just not now. Obviously a systemic crash benefits few and the masses will go crazy. You are correct for the most part, and the reality is that the smoothing over of the financial system through inflation is the "politically correct" choice. The truth is that USA is stuck in a real bind where it's heavy leverage can only be sustained by continuous growth, no matter how "fake" it is. It's a vicious cycle. The masses do not want to face the truth, in fact, very few want to face the truth. Very few are actually up to the challenge of unwinding this financial mess and re-establishing true economic progress. The ideal decision is to deal with the mess and pay the consequences, no matter how harsh. But Ideal and Real are different from each other, and I am not talking about the spelling. The actual 50bps cut may not even have much effect, it's more about perception & sentiment.
You hit the nail on its head; of course; if you are in upper class; you gain from these rate cuts; all these middle class and the poor getting screw in varies degree. If the same thing had happened in different part of world; we shall see many revolutions or maybe wars among different social classes. Why shouldn't the rich and people in power suffer the same consequences of irresponsibilities as the poor does? Anyway; i am not encourage a bit about Ben's cuts; my equities far less to fight against the fed. It reminded me that how great Mr. Soros had done to the BOE.
Ah, so we can all agree to disagree. I see my perspective seconded by many other intelligent posters, whose opinion I definitely respect. I honestly think it's better to put the brakes on slowly, but hey, that's just how I think. Either way, I plan on profiting from what happens, however things work out. As far as the working folk are concerned, if their job can be outsourced to India for less than 1/10th of what they're being paid, business seems to think that's the way to go too ... OK, gotta go throw out the latest batch of 20 letters from banks asking if I want a credit card from them. Good trading, Jimmy Jam