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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Gary Mohilner who wrote (9237)	6/25/2008 1:36:38 AM
From: Elroy Jetson	Respond to of 71406

The CEO of Dow Chemical, Andrew Liveris, was on the PBS Nightly Business Report saying the Fed has no real choice other than to raise rates. He says inflation is hurting their business while demand is anemic due to the decline in housing prices and that won't be helped by a rate cut. "Frankly there's very few levers left and you have to take the risk that raising rates will cause some demand to go weaker. I think it's back to where Paul Volcker was in the early 80s. There's a real risk here and we've got stagflation - you can only break out if it one way and you've got to take on inflation head on." Who gets saved, banks shareholders or the real economy? .

To: Gary Mohilner who wrote (9237)	6/25/2008 4:48:28 AM
From: Real Man	Read Replies (1) \| Respond to of 71406

Right. Those expecting Fed hawkishness only heard hawkish words, not actions. The Fed is still the same - propping markets, saving popped bubbles, blowing new bubbles by keeping rates well below inflation. Now they want to blow a stock market bubble, not an oil bubble, and there lies the problem... They ran out of "good" bubbles to blow. But we are still observing very green stock futures at night. Can't keep these hands off the markets, and the Ponzi scheme policies are coming back home to haunt them... via much lower USD, but derivatives are still expanding exponentially, now hitting a quadrillion. QUADRILLION!!! THIS IS UNBELIEVABLE!!! What were the actions? Panic cuts in January that doubled many commodity prices since... Will these actions EVER cut the Fed's credibility with foreign investors? I think we have seen some of that, as Trichet essentially forced talking about hikes on Bernanke. If US Fed does not follow through, expect the Euro to soar, and a major dollar weakness. I have a feeling the crisis will not be over until the creator of the crisis, the Fed (easy money) is fully discredited. Unfortunately, that means the buck going down a lot.

To: Gary Mohilner who wrote (9237)	6/25/2008 5:05:52 AM
From: Real Man	Read Replies (1) \| Respond to of 71406

It is painful to see US manufacturers cutting jobs and going out of business because of incompetent Fed that is compounding the problem instead of contributing to the solution!!! These companies, not the banks, have to be cherished and saved by the government. They are given the hard times instead. Guess what? As they go out of business, US of A will shed its manufacturing capacity further, and that will contribute to soaring current account deficit despite already ongoing recession, and a sharply lower USD down the road. What happens if the big three Detroit companies go under? That will mean Americans will have to buy ALL their cars abroad. What about other manufacturers that are going under because of these "policies"? Gonna be worse than Argentina.

To: Gary Mohilner who wrote (9237)	6/25/2008 6:38:07 AM
From: Real Man	Read Replies (1) \| Respond to of 71406

I expect a lot of jawboning (in a sense that the economy is recovering, so push the clownbuck up), but no action, and then eventually a move lower for the rates if the precious stock market does not recover. That's how this Fed operates - blowing bubbles forever, killing the real economy. All this will continue, since the Fed, who is responsible for all the troubles, is now fully in charge and have their powers expanded. That is until foreigners shun US assets, the dollar collapses along with their precious stocks, bonds and derivatives once the Fed's credibility is completely lost ... More lies, never the truth. Americans need to abolish the Fed and go back on gold standard as soon as possible. The future generations have a huge bill to pay for these misguided bubble blowing policies.