I think this part of the Northern Trust piece explains how they (the fed, the treasury, and their financial institution cronies) try and keep the credit Ponzi scheme going. I just wonder who ends up with the Old Maid card at the end of the game?.:
"The federal government will be a big demander of credit in the months ahead. Banks are likely to accommodate some of that demand, especially if the Fed keeps the funds rate at 1% for a "considerable period." Finally, if speculators expect the U.S. dollar to continue to depreciate, they will borrow greenbacks at rock-bottom interest rates and use these borrowed dollars to invest in money market assets denominated in Aussie dollars and euros. This, too, will lead to faster bank credit and money growth.
My translation (you may not want to try this at home, it looks terminal, you'll need a quick trigger, big time balls, and lots of luck, and it could be hazardous to your financial health):
1. Encourage every conceivable carry trade imaginable, use credit (even more), to finance purchase of longer maturities (try and maintain at least a 200 bp spread, if possible), use credit to work the carry trade in foreign assets, get rid of US assets (makes total sense). Create the biggest fucking carry trade (the mutha of all trades) yet: short dollars, long everything else.
prudentbear.com
While they're at it, might as well start working carry trades in rapidly appreciating commodities and real assets: energy absolutely,
64.4.16.250
ag products that China needs, why not?
64.4.16.250
2. Big transfer payments (tax cuts) to the consumer again in 2004. This may (?) keep them spending at levels (may be problematic, how many second and third homes do people really need?, and that 60 month car loan, gee it's only half paid off) to help keep Asia overheated enough so that they can suck up and use every last commodity stockpile ($40 oil? Thank God for the tax cut!)in the world and allow speculators to clean up on the commodity trade mentioned above. It would also allow the big multi-nationals more time to keep up their "hurry up" race-to-the bottom transfer of labor and capital out of the US. The continued mechanism (this time racheted up) for this is more runaway debt creation from government, this time to the tune of $700 billion, next year. I guess they can count on Japan and China to help with funding this "little" task?
3. The goal of the "economic policy"?: pray that a few more temporary and burger flipping jobs are created in the US to keep the markets fooled (remember it's quantity, not quality, that counts) long enough to get to the election. LOL. |
