US rate decision

zellers_077 · Mar 28, 2006

After reading today's decision to hike the base rate to 4.75 and leaving the "options open" to rise the rate more, I just got a dobut, for whom Mr. Ben B is working for?
Mr. B and his troops working for USA or Iran? Why they are so desperate to bring down the economy, which is already struggling?

In my view, its already struggling. There are indicators that house sales are cooling down, already the outlook for next quarter is gloomy, and the strong dollar is not helping much.

How, for my little brain (I gladly agree on this point), its pretty difficult to understand what is the reason for this VERY hawkish stand. May be they are going to call this as "Friendly Fire" on US economy!

Sigh!

jonpo · Mar 28, 2006

Oil prices - metals - gobal excess money supply - a declining dollar -

dude Bernanke is the only guy keeping the economy afloat. without rewarding investors (chinese) for holding crappy ever devalued/inflated US dollars. US incorporated would be abandoned by international capital in an inflationary implosion. if you want bubbles in asset prices. and price instability then roll on the free money.

Bernanke is saving their ass and their dollar. in god we trust....

Racer · Mar 28, 2006

The so called core inflation rate has taken out all inflationary things so that is the real problem... it has created an illusion that the market has relied upon.

ajaskey · Mar 29, 2006

zellers_077 said:
After reading today's decision to hike the base rate to 4.75 and leaving the "options open" to rise the rate more, I just got a dobut, for whom Mr. Ben B is working for?
Mr. B and his troops working for USA or Iran? Why they are so desperate to bring down the economy, which is already struggling?

In my view, its already struggling. There are indicators that house sales are cooling down, already the outlook for next quarter is gloomy, and the strong dollar is not helping much.

How, for my little brain (I gladly agree on this point), its pretty difficult to understand what is the reason for this VERY hawkish stand. May be they are going to call this as "Friendly Fire" on US economy!

Sigh!

The US economy is doing very well. Unemployment is down. Y/Y personal earnings growth is 6-8%. Corporate and independent business taxes are up double digits from last year. Tons of cash and little debt on company balance sheets. I have no idea where rates should be (although I am in the worry about deflation - not inflation - camp). But the Fed hasn't really hurt anything yet - except the mortgage industry which needed hurting.

leovirgo · Mar 29, 2006

Nice thoughts. I agree. A little bit of market correction- even if it is 300 billion dollars wipe-off from the indices, wouldn't hurt anybody.

ajaskey · Mar 30, 2006

US Tax Receipts

FED hasn't really touched the economy yet - except for mortgage market. Free data from http://www.fms.treas.gov - here is the Y/Y growth of the 12 month average of tax receipts to the gov't. Notice:

1) Tax cut actually brought in record taxes
2) Economy so strong that if the FED had not been raising the rates then we would be in trouble.

US rate decision

zellers_077

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jonpo

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Racer

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ajaskey

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leovirgo

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ajaskey

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