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Strategies & Market Trends : Ride the Tiger with CD

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From: koan	8/18/2007 12:41:33 AM
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So where are we now? As I see it the feds have to cut the discount rate a few more times and lower the fed funds rate. I will defer to Marc Faber here who estimated the fed would need to lower the fed funds rate at least 2%. Dollar will tank when they do that! All of this means the dollar tanks and gold, silver and PT rise! I don't have a theory on base metals-lol. It is important to distingish between the discount rate and the fed funds rate. The discount rate just infuses cash into the banking system. The fed funds rate is what prime is based on and prime is what all the banks and other financial institutions use to make in house loans. YOu know, prime plus 2 for bank friends, prime plus 4 for non bank friends, prime plus 6 for desparate people and prime plus 10 for building a mine-lol. We still have a big chance that this sub prime problem will blow right through debt and to the dollar per se as well. Last, but not least. You youngsters are too young to remember but gold also acts as a safe haven when people are scared. The Russians are now tauntng the US because bush wants to build that stupid missle defense system in Europe (he never thinks anything through!). That is nuts. The middle east cannot get us with missles. All it is doing is picking a fight with the Russians who now are also gladly teaming up with the Chinese who are pissed about Taiwan and trade sanctions. And bush is on vacation. He has taken a year of vacations since taking office. Nice work if you can get it-lol. Who is minding the store? All of these events should play into golds hands. Of course it may also be the end of the world we are looking at. Can we survive 18 more months of the sociopathic leadership we have come to know.

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