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Post by alrighteh on Feb 16, 2010 13:10:37 GMT -5
So help and tell me why I am wrong - Thanks
The US needs people to buy treasuries to service it debt and continuing deficits and the there are two emotions that would make them buy treasuries
Greed
If the fed uses greed then it continues to kill the dollar and gets a rally in the stock market but it has to pay higher interest rates to attract money to the treasuries.
The cost of servicing the debt goes up via the increased interest rate at the same time there is a loss of superpower status as china can continue to play the “sell treasuries” game (especially when there are few buyers out there)
This dropping dollar will kill the rally because of higher interest rates at he same time it impoverishes the American people even more as the cost of everything goes up and we end up with inflation.
The jobs that went to china will not comeback unless Americas lowers it labor costs and standards significantly.
Fear – kill the rally – raise the value of the dollar – this will attract money to treasuries as people will want just the return of their money instead of return on their money. This will allow the US government to finance their debt at lower costs. It also a geopolitical advantage as when China start selling US treasuries there will be willing buyers out there.
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Post by cosmic on Feb 16, 2010 13:16:29 GMT -5
So help and tell me why I am wrong - Thanks The US needs people to buy treasuries to service it debt and continuing deficits and the there are two emotions that would make them buy treasuries Greed If the fed uses greed then it continues to kill the dollar and gets a rally in the stock market but it has to pay higher interest rates to attract money to the treasuries. The cost of servicing the debt goes up via the increased interest rate at the same time there is a loss of superpower status as china can continue to play the “sell treasuries” game (especially when there are few buyers out there) This dropping dollar will kill the rally because of higher interest rates at he same time it impoverishes the American people even more as the cost of everything goes up and we end up with inflation. The jobs that went to china will not comeback unless Americas lowers it labor costs and standards significantly. Fear – kill the rally – raise the value of the dollar – this will attract money to treasuries as people will want just the return of their money instead of return on their money. This will allow the US government to finance their debt at lower costs. It also a geopolitical advantage as when China start selling US treasuries there will be willing buyers out there. I've had a few long convos with Brosin on this type of topic. The gist was that ultimately you will be correct, but there must be more inflation first to pump the economy before those deflationary aspects will come into play. After the 2012 election perhaps? |
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Post by alrighteh on Feb 16, 2010 13:21:08 GMT -5
so right but broke -
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Post by kingdisco on Feb 16, 2010 13:44:59 GMT -5
your scenario could be correct, but the timeframe may be not. you may short thinking things will get dire.... but how far ahead is the market discounted? what percent chance is the market pricing in?
if there was a major macro event that impacted the markets would you expect it to take months to unfold?
now i'm rambling LOLOLOLOLOL.
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Post by philip2012 on Feb 16, 2010 16:36:01 GMT -5
This dropping dollar will kill the rally because of higher interest rates at he same time it impoverishes the American people even more as the cost of everything goes up and we end up with inflation. The Fed, nor the American Govt. give a damn about the american people. - They will print until they run out of ink/paper. That will not be for some considerable time. At least 6/9 months, maybe 1, even 2 years. When the inflation does finally kick in from the money printing, it will indeed kill the $, and destroy much of the western world economies. - For traders, what remains important is seeing the best point to exit into physical assets, not least of which gold/silver to then use to convert into whatever currency they implement post-collapse. |
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Post by brosin on Feb 16, 2010 16:48:49 GMT -5
So help and tell me why I am wrong - Thanks The US needs people to buy treasuries to service it debt and continuing deficits and the there are two emotions that would make them buy treasuries Greed If the fed uses greed then it continues to kill the dollar and gets a rally in the stock market but it has to pay higher interest rates to attract money to the treasuries. The cost of servicing the debt goes up via the increased interest rate at the same time there is a loss of superpower status as china can continue to play the “sell treasuries” game (especially when there are few buyers out there) This dropping dollar will kill the rally because of higher interest rates at he same time it impoverishes the American people even more as the cost of everything goes up and we end up with inflation. The jobs that went to china will not comeback unless Americas lowers it labor costs and standards significantly. Fear – kill the rally – raise the value of the dollar – this will attract money to treasuries as people will want just the return of their money instead of return on their money. This will allow the US government to finance their debt at lower costs. It also a geopolitical advantage as when China start selling US treasuries there will be willing buyers out there. I've had a few long convos with Brosin on this type of topic. The gist was that ultimately you will be correct, but there must be more inflation first to pump the economy before those deflationary aspects will come into play. After the 2012 election perhaps? Bingo - that's definitely the gist. I can discuss this topic at length like it's my job, but it'll have to wait until later. Got some errands to run to pick up some final pieces for the place. Almost started rambling here but I'll be back in a few hours. The new board will help it not get lost. Oh and I came into this thread to post a simple message too: "Good Question."  |
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Post by kingdisco on Feb 16, 2010 16:53:37 GMT -5
how much more drugs need to be used to get all the new bills contaminated? lolololol
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