Thursday, May 11, 2006

Interesting comment from the US

Comment

The US economy peaked in January and is tipping into an unstoppable "bust" whether or not the Federal Reserve halts its cycle of interest rate rises, Lombard Street Research has warned. The economic research group said the US property market was crumbling, taking away the key prop of the consumer boom.

Posted by TyrellCorporation @ 10:55 PM (882 views)
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6 thoughts on “Interesting comment from the US

  • Churchill once observed that: ‘The Americans will always do the right thing – after they’ve tried everything else’

    Put another way, they tend to let a fad run it’s course until it self destructs – before addressing what caused the fad in the first place.

    US economic data is a pain to reconcile, as they use different terms and calculation methods to everyone else – but a serious downturn in their domestic economy does look likely now.

    – The UK will not be immune!

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  • The Dow wasn’t the only thing to fall yesterday, the dollar too (and on the day the Fed put up interest rates!). There is no doubt that the pound is profiting form the dollars demise at present, however this will be short lived. Once the dollar has hit rock bottom, investors will increasingly look for a safe and STABLE place to shelter. This will not be the pound, which later this year is likely to take, well err… a pounding (to say the least). Message: if you have savings (and I know many who read this site have), it might be sensible to open a euro account (Nationwide do one, for example). The short-term returns will not be as attractive, but depreciation is a lot less likely. Just a thought…

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  • Tyrellcorporation says:

    Interesting Harold. I’m getting increasingly concerned about where to put my wad of cash. It’s in a Nationwide internet account at the moment but I read an article the other day that getting interest on cash isn’t that wise at the moment. Any cool ideas anyone? and don’t say BTL!!!

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  • bidin'matime says:

    You will always find articles that say don’t leave your money in cash deposits – mostly put there by people selling stock market based investments. Just beware the potential downside in the stock markets as interest rates rise. Also currency speculation is fine for those who like to gamble and you might gain if sterling falls – but if you keep it in sterling it doesn’t mean your cash is worth less – unless you want to buy foreign property or investments.

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  • Bidin’
    True, but with depreciation will probably come inflation, which if higher than IRs amounts to less savings. Like it or not, there is no such thing as a no gamble situation, even if you hide it under the mattress – anything can change in value, especially a vulnerable currency.

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