Wednesday, October 31, 2007

There goes the Dollarrrrrrrrrrrrrrr…

Fed delivers second US rate cut

As expected then, will this fix their problems?

Posted by speculatorone @ 06:37 PM (959 views)
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13 thoughts on “There goes the Dollarrrrrrrrrrrrrrr…

  • This won’t help the cost of making cents.

    A plastic cent coming soon…

    ..wait that needs oil…

    how about just dropping the coins and only using notes.

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  • cut in both funds AND discount rate (rate for borrowing with suitable collateral?) . The latter wasn’t so expected. So they still did a little more than expected.

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  • Just hit $2.08 to the pound!

    I just watched the rates rise and rise! Astonishing !

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  • tyrellcorporation says:

    Can someone with more knowledge than me tell me how much this will actually effect the inflation-importing side effect of the continually weakening Dollar? Will inflation start to ratchet up significantly in the US as a result of these continued cuts and Dollar weakness and if so doesn’t a spiral effect start to develop?

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  • tyrellcorporation, inflation in US is already high. But the FED thinks in the current scenario inflationaary collapse is more desireable than whole economy collapse.
    At least they won’t be blamed for doing nothing. Rather than doing the blamed for doing the right thing (like Mervin King) .

    What I find more interesting is the US stock market. If stock market is the barometer of the economy and if the US economy is going to slow down then how come the stock market is going up and up?

    The only reason I can think of it is because of people are buying short. i.e. Selling today at higher price and buying tomorrow at low price.
    So the bigger the bubble blow. The bigger the boooom and then buy after that.

    that is my theory any one else got any ideas?

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  • If the $ keeps heading South I’ll soon be able to afford that Harley Dyna Wideglide and the Bayliner Command Bridge !!!
    But better wait and see which way the £ goes after the next few MPC rate decisions.

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  • David Smith's Sub Prime. . . says:

    Does anyone here recall reading Sven Hassel, Monte Casion?

    There, the Deutchsmark was on the wane if you remembr Porta… Greenbacks was all he would accept….

    Oh dear oh dear oh dear… And all to pacify Wall Street buddies of Dubbya…

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  • Cable is off to 2.20 and beyond then. Fed is going to worry about the economy and not the dollar so prepare for some major capitulation. How long will Asia continue to buy crappy tresuries and fund America?

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  • USD = $1.06 CAD, $0.93 AUD & 0.48 Sterling! & oil at $95 a barrell. Clearly they have let the reigns off inflation, inflate away the debt. But the debt is just going to get bigger and bigger.

    Fancinating stuff but my American dollar travellers cheques are now worth less than a pack of bog rolls!

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  • I live in NYC and as a saver and a prospective housebuyer. This rate cut maried with the prevous 50 basis points fills me with dread. I will be punished for saving since my returns less tax are way less than real inflation of about 5-8% (forget CPI and other measures, they in no way reflect the street prices for food, transportation, petrol, services etc) and there is now incentives for house pices to stay artificially high. I urge people to read the Big Picture blog to see a view of the true state of the US economy (with frequent references to the UK housing market) http://bigpicture.typepad.com
    What next…return to the UK or suck it up!

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  • In my opinion,the BOE, BOJ, ECB et al are going to be forced into competitive devaluation and thus follow the USD down.This could be the beginning of the end of fiat money for now.

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  • TC,much of world trade is priced in dollars.It won’t affect us unless sterling gives up ground.Unfortunately this is likely as we have the same rpoblems as the US-high govt debt,high personal debts and massive current account deficits.If sterling slides then the cost of everything will move up.

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  • planning4acrash says:

    The US has been asking China to let the Yuan float freely (relative to dollar) for some time now. Why? To reduce the US foriegn deficit and to make its home made products competitive. Well, looks like the Fed is trying to force the issue here. Could this be leading to China’s Black Monday? In a game of Chicken like this, who will win?! I personally treat this Fed cut as part of a wider trade war between the US and China.

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