Boo! Fed cuts rates - again! Oct 31, 2007 - 23:28 PM
...which is great for stocks...temporarily. But the economy as a whole, and for the dollar, this is just a bandaid. The direct result will be a lower dollar, higher inflation, and gold going up. Lowered federal rates does not have a direct effect on home loans, such as lowering the borrowing rate, so why is the fed doing this? Foreign investment is already fleeing. Foreign investment is drying up, reducing the rate they purchase our Treasuries, and this lowered rate won't make the Treasuries any more attractive to buy, so why is the fed doing this? Well, it does make our trade deficit smaller, since by doing this we throw the dollar out the window. A cheaper dollar makes loans easier to pay, increases our exports because our prices are cheaper. So it makes our trade deficit smaller and makes mortgage defaults less of a hammerblow on the deficit stats, but with crude prices about to hit $100 I don't see how weakening the dollar will hide anything, since they can't hide the gas bill for too long. Darth Cheney says "Deficit don't matter". But since the deficit is about the only thing a weakening dollar helps, then why the hell are they doing this? Basically, wake up to high fuel prices, housing prices dropping because of foreclosures, and jobs dropping because homebuilding will slow and stop. What can you do? Buy gold, silver, get out of your ARM and into a 30 year mortgage, buy euro- asian stocks and mutual funds. If you are really extreme, buy guns and whiskey and hide out at the mountain land you socked away during Y2K and hoard the junk silver you bought in bagfuls since that will be the new currency - stuff like 1964 Kennedy half dollars and 10th of an ounce gold. The economy is about to implode, and your savings along with it. So what are you going to do? Sit around and get screwed like the Argentinians did when bank funds were frozen, including ATMs? They didn't see that coming. Are you going to burn your banknotes like they did in Weimar Germany because it was cheaper to do that than use it to buy firewood? Insulate your attic, like they did with Confederate currency during the Civil War? Or start doing something to shore up your finances for the coming dollar collapse? Consider this: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State, - Joseph Goebbels, Nazi Propogandist Doom and Gloom baby, doom and gloom...
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