Jump to content
House Price Crash Forum
Sign in to follow this  
drhewitt

Ben Advised Not To Increase Rates By 0.5%

Recommended Posts

Interesting snippet from Larouche, does anyone have any other info to confirm this?

http://www.larouchepub.com/pr_lar/2006/lar...l_samarrah.html

Foolish Bush Tries to Flee Financial

`Appointment in Samarra'

This release was issued on July 1 by the LaRouche PAC political action committee.

The Bush Administration cannot just repeatedly raise interest rates as a way for dealing with this global financial crisis, said Democrat Lyndon LaRouche, chairman of the LaRouche Political Action Committee (LPAC), on the eve of the FOMC meeting. It won't work, and people in the financial community and the Administration know it.

In response to reports that the Federal Reserve chairman had been warned not to raise the Fed Funds rate by 1/2 percent because such a high increase—twice the usual hike—would blow out numerous hedge funds that are actually run by major U.S. and other banks, LaRouche, said, "So what. These institutions will go under anyway. Trying to avoid that reality is like the classic tale, 'Appointment in Samarra.' There are some things that you cannot avoid. The Administration has no choice; it's going to happen anyway."

Speaking just after the June 27 seminar on the New Bretton Woods, held by EIRNA in Berlin, Germany, LaRouche said that the Benjamin Bernanke policy of raising rates, following Greenspan's 16 successive rate hikes, is no policy at all.

Share this post


Link to post
Share on other sites

In response to reports that the Federal Reserve chairman had been warned not to raise the Fed Funds rate by 1/2 percent because such a high increase—twice the usual hike—would blow out numerous hedge funds that are actually run by major U.S. and other banks, LaRouche, said

If they were really contemplating 1/2 percent then they must be very worried indeed about the 'data'. There are economists talking the US housing market down every day on Bloomberg. It won't take a lot more of this rate hike uncertainty to see it tumble.

Share this post


Link to post
Share on other sites

Most of the artical is clearly politically motivated but he may have a point here.....

"If certain things collapse, you keep the flow of credit into the physical economy: areas that will not collapse. Through this approach, used by Franklin Roosevelt when he became President, the economy will bounce back—but you have to have the nerve to sweat it out.

The building of the Hoover Dam is widely creditted with dragging the US out of the Great Depression, but Rosevelt was the American Churchill, and that quality of leadership just does not exist today. Sadly! :(

Share this post


Link to post
Share on other sites

"We don't think the President has either the brains or the guts to do this; if he does, we will be pleasantly surprised. But such a solution is unlikely to come from the poor fool in the White House, who has serious mental, and emotional, problems."

That doesn't leave much room for poetic interpretation!

Share this post


Link to post
Share on other sites

last week's US IR decision was the easiest money making opportunity for quite some time - surely the idea that after raising at.25% the Fed was suddenly going to add .5% was the most bizarre notion you ould think of? if they had done it the fall out on the equity markets would still have been horrendous

Share this post


Link to post
Share on other sites

last week's US IR decision was the easiest money making opportunity for quite some time - surely the idea that after raising at.25% the Fed was suddenly going to add .5% was the most bizarre notion you ould think of? if they had done it the fall out on the equity markets would still have been horrendous

That this stage I would agree, but there must be a point at which 0.25% is negligable and 0.5% is a reasonable hike. Still along way from that point though IMO.

Share this post


Link to post
Share on other sites

IR are not an American problem, they are a global problem. The imbalances created over the last decade or so by excessive Japanese liquidity and overproduction in Asia generally are finding their point of equilibrium. The coming financial storm suggests that IR sensitive assets might not be a safe place to park your money.

The entire world must hike rates, not just America. The ECB at 2.75% are still creating liquidity as the effective rate is continuing to cause inflation is some markets, notably Iremand and Spain. The incoming EU member states are also feeling the bubble inflating as cheap money has not yet been earned in their respective economies. The fact that people in the UK can still "afford" to buy homes at ridiculous multiples suggests that our IR are also overly accomodative, even negative.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.