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Us Economy Heading For Stagflation...athe Rest

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Guest mattsta1964

Problems are deepening in the US economy and Bernanke and the Fed Reserve cannot be honest about the perilous state of the dollar without sparking off a panic

Interesting to see such forthright....and accurate....analysis on the Fox Channel

Ron Paul interviewed on Fox Business News - 28/02/2008

"We're in uncharted territory. We've never experienced a situation like this."

Edited by mattsta1964

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Problems are deepening in the US economy and Bernanke and the Fed Reserve cannot be honest about the perilous state of the dollar without sparking off a panic

Interesting to see such forthright....and accurate....analysis on the Fox Channel

Ron Paul interviewed on Fox Business News - 28/02/2008

"We're in uncharted territory. We've never experienced a situation like this."

Shame it's on Fox Business News. The sheeple aren't going to get it until it's on NBC. Then again, maybe there's nothing the sheeple can do about it - except panic - so maybe it's better they don't know.

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Guest Skint Academic

Thank you for that link. I found it very interesting. I've been trying to persuade my parents to move some of their savings into Euros but as the guy said, it's just another fiat currency. The dollar, the pound and the euro are like three turds in the sea. The dollar is a dense pan-cracker that's sinking like a stone, the pound is following it and the euro seems to have a little bit of methane left in it. Trouble is that they might well be selling their second house and lending us the money when we're ready to buy our own place instead of us going to the bank. I'm worried about what's going to happen to that money if it's left in a bank.

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Here is a long list of bad US economic data.....

http://www.cnbc.com/id/23408309

As if investors didn't have enough to worry about, Friday's batch of economic numbers shows more signs of recession as well as its evil twin--inflation. First, the government reported that U.S. consumer spending rose more than expected in January, but the gain was eaten up by swiftly rising prices. Then, a Chicago-based business group said U.S. Midwest business activity contracted sharply in February, showing that even areas of the country least affected by the boom-bust housing cycle are feeling ripples from the crisis.

On top of that, U.S. consumer sentiment dropped to a 16-year low in February, hitting levels that usually sound the alarm bells of recession, on worries about declining incomes and rising unemployment, a survey showed.

No surprise, then, that stocks opened sharply lower on Friday--and then proceeded to fall even more.

Friday's reports were just the latest in a string of worrisome news about the growing threat of recession and inflation.

"Over the last three to four weeks, there have been a string of economic releases that were dramatically weaker than expected," said John Canavan, a market analyst at Stone and McCarthy Associates. "The implications are quite negative for the economy."

The only bright spot: futures traders are now speculating that the Federal Reserve will cut interest rates by three-quarters of a point at its March 18 meeting instead of the half point that was expected previously.

The combination of higher inflation and an economy struggling with a deep housing downturn and tight credit conditions have led some economists to warn of the risk of "stagflation" -- a combination of stagnant growth and spiraling prices.

Fed Chairman Ben Bernanke told Congress on Thursday the US was not heading into a stagflationary period, saying he expected swift-rising commodity prices to at least level out and lead to an easing of price pressures.

Bernanke also made clear he stands ready to lower a key interest rate again. The Fed, which started cutting interest rates to bolster the economy in September, has turned much more aggressively recently. In eight days in January, the Fed slashed rates by 1.25 percentage points -- the biggest one-month reduction in a quarter-century.

Even so, Friday's economic news only seemed to heighten worries about stagflation. The Commerce Department said personal spending rose 0.4 percent last month, while personal income increased by 0.3 percent. Analysts polled by Reuters had forecast both personal income and spending to rise by 0.2 percent. When adjusted for inflation, however, spending was unchanged, due largely to rising food and energy costs.

"Spending was a little hot, but at the same time the cost of food and energy are skyrocketing so that's not that surprising. At the same time, it was higher than what people thought," said Beth Malloy, bond market analyst at Briefing.com in Chicago.

The personal consumption expenditure price index, a key inflation gauge, rose 0.4 percent in January after an upwardly revised increase of 0.3 percent in December. The index has surged 3.7 percent over the past year, the biggest year-on-year gain since September 2005. Excluding volatile food and energy costs, the index was up 0.3 percent -- in line with analysts' expectations and the steepest monthly rise since September. On a year-over-year basis, this "core" price index rose 2.2 percent, matching the prior month's gain.

Many officials at the Federal Reserve, which has cut interest rates sharply since mid-September in a bid to combat recession risks, have said they prefer to keep the core price gauge in a 1 percent to 2 percent range. The report on consumer spending, showed Americans dug into their savings for a third straight month in January, as the personal savings rate stood at a negative 0.1 percent of disposable personal income.

Alice

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Guest mattsta1964
Thank you for that link. I found it very interesting. I've been trying to persuade my parents to move some of their savings into Euros but as the guy said, it's just another fiat currency. The dollar, the pound and the euro are like three turds in the sea. The dollar is a dense pan-cracker that's sinking like a stone, the pound is following it and the euro seems to have a little bit of methane left in it. Trouble is that they might well be selling their second house and lending us the money when we're ready to buy our own place instead of us going to the bank. I'm worried about what's going to happen to that money if it's left in a bank.

You're right to be concerned

I'm in a similar position wondering where to put my savings. Gold and silver seem like obvious choices but I still fear there are people with the power to crush the precious metals markets, especially if prices go ballistic.

I guess the question we have to ask ourselves is:

Is the destruction of the dollar deliberate or the result of greed and recknessness. Personally, I feel there are people in the shadows deliberately destroying the dollar with the intention of wiping out the middle class in America and ultimately to destroy the US as a sovereign nation. If this theory is correct, precious metals will not be allowed to usurp fiat currency under any circumstances as inflation proof money takes power away from the banking system and the international system of bank credit. If on the other hand, the collapse of the US economy is just the result of bare faced greed and stupidity, gold and silver might still be a safe hedge. I'd certainly look at alternative energy as the 'next big new thing' and investing a proportion of your savings in this might preserve your savings. You might even make some money!

Either way, putting savings into Euros might offer some short term protection, but longer term, the Euro is just as flawed as the dollar.

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  • 293 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%



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