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Well, you are so stupid. If you do not understand the economic theory, please do not post anything relating to economy.
What is need the most in the US economy is "growth", without growth, job can not be created, if job can not be created, the recovery can not be sustainable. So, how to stimulate growth ? Cheap US dollar and low interest. Of course, you will argue that cheap dollar will cause inflation and the rest of the world will sell off dollar. Well, that is only theory, and iin the real world , it is another story. We all know that all the commodities are currently priced with dollar, if dollar devaluated with Euros, it only means that you will get cheaper commodities if you buy with euros, and the price is still the same if you buy with dollar, which will not create an unbalance between supply and demand, because Europen will not consume more commodities even the price in Euro is lower if the recovery in Eurpe did not materalize, and which also means no inflation. All in all, the inflation is caused by unbalance of supply and demand . If FED raise the rate at this junction when the economy is still weak and unemployment is still very high, it means the corp America's production cost will be even higher due to the cost of money is higher( from 0.25% to 2% , you are talking about the money cost increased by 800% ), with the production cost increased significantly, while the producer can not transfer the cost to consumers when the economy is still very weak, it means more companies will be bankrupt, and more people will lose their jobs , and we are running huge risk of falling into the great depression, as a result, to raise interest now means suicide economically. The only way to pull out this mess is throught growth with low interest rate and cheap dollar, as export grows, companies will make more profit, and create more jobs, and confidence will be restore and people are more willing to take riskk and invest, as economic activities increases, more jobs will be create. Only growth can reduce our debt relatively. As you know if you have $1T of debt, relative to 10 T of GDP, your debt load is 10% of GDP, however, if you can grow your GDP fast , say, the GDP grow to $15T, $1T of debt is only 6.6% of GDP. What is worse about raising rate now is that as rate being increased, your burden to serve the debt will be even higher. As dollar devaluates against Euro, no one wll sell dollar as there is no replacement available around the world . Ao, stop talking about raising rate again, this will only push this country into greate depression, and by that time, the dollar will be worthless, because as US economy falling into the cliff, countries held chunk of dollars will worry that US will default its debt and will have the ability to serve the debt as the US economy collapse. Rating :
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Reckless FED policy keeping rates at zero is completely...
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rockinl23 | (2 Ratings) | 4-Nov-09 10:46 am | ||
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I agree that the Fed must start to put up the Fed ...
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manniesalad... | (2 Ratings) | 4-Nov-09 03:10 pm | ||
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Re: Market is nuts, ISM miss, oil rally
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edward_3141 |
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5-Nov-09 01:51 am | ||
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You don't seem to understand. Rates should on...
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rockinl23 | (1 Rating) | 12-Nov-09 10:42 am | ||
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does anyone have a clue what these two g...
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calderlogan | (1 Rating) | 12-Nov-09 11:01 am |
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