<<<2.5% is only an attractive interest rate until February. Then it will be time for another pay increase, heading for the Happy Meal>>
... slim chance, unless accompanied by greater than 2.5% devaluation of USD, in which case you lose in any case. >
Jay, the US$ has declined against:
NZ$ from 39c to 71c
Gold from $323 [when I declined to buy] to $449
Euro by 30%
Yen by 30%
QCOM from $12 to $41 split-adjusted
NZ housing in US$ by over half.
Crude oil from $15 to $50
Those are serious declines. On purchasing power parity parameters a Happy Meal is no longer particularly cheap in NZ$ for an American tourist. They can still go shopping in China at the pegged rate and acquire bargains galore. But a gold door knob is costing them serious money. A big platinum catalytic converter for their dirty great SUV is costing them a bundle, while wolfing down gallons of expensive oil.
They are still enjoying bargain rates for borrowed money and it's time for that to be cancelled too. I want interest rates back up where they belong.
Americans have had a great time for years, shopping around the world for bargains on borrowed money. Now they have IOUs up to their waists and it's time for them to cancel holidays, stop spending on gold, vacations, SUVs, oil, and Happy Meals in Middle Earth and get back to work. The seventy million indebted dwarfs will have to leave Condoleezza and King George II to worry about the WAT and fighting the crocodiles while the dwarfs head off to the mine and swamp-draining projects singing, "I owe, I owe, it's off to work we go...".
Mqurice |
