Gumnam, <<JGB>> I am just back from swimming, before going back to swim again.
Another thought is that I forgot that each action will lead to a reaction, et cetera, and in the two 'unrelated' cases of
(a) JGB sinking / Japan credit withdrawn, and
(b) California sinking / credit to states withdrawn
... what will the FED's most likely reaction be?
Let me think for a very short moment, without great effort, and certainly without any originality nor imagination ...
CUT RATES by 100 basis pts! BUY STATE BONDS ! BUY JAPANESE BONDS !
Surely, in the case of above (a) and (b), 100 basis points is not too much to burn, as compared to LTCM, Mexico Crisis, Russian Collapse, and Asian Financial Storm?
Perhaps this is not the best time to do a refi after all, and that moment is still in our future;0)
Just remember, in the event of currency collapse due to monetary inflation, stock prices supposedly rise, though not against gold, and interest rate rises, but not as fast as currency loses value. Let us watch to see if true when simultaneously applied to the largest and second largest economies, and the largest debtor together with the largest creditor :0)
Chugs, Jay |
