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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (54682)2/25/2006 11:12:02 AM
From: zebra4o1  Read Replies (1) of 110194
 
A sacrifice ratio of 4 sounds like a fancy way of saying that the US economy now cannot handle high interest rates - but somehow this leads to the conclusion that the Fed is going to keep raising rates?

Maybe the Fed is playing a game of chicken? The Fed is trying to show those Asian central bankers who is the boss? US long term interest rates are now set by China and Japan. And their policy is to stimulate the US economy with low interest rates. These FCB might be as concerned about a US housing slow down as people on this board are. Could they possibly be as smart as us? That is why they keep supporting Fannie's and Freddie's bonds. It is Keynsian economic stimulus applied internationally.
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