Goldman: It'll Be a Disaster If Fed Raises Rates
From The Business Insider, Jan. 25, 2010:
Not only does Goldman say the fed won't raise rates, but they even say that the Fed shouldn't; which if Goldman-conspiracy theorists are right essentially means the Fed won't.
http://www.businessinsider.com/goldman-no-way-the-fed-will-h...
http://www.businessinsider.com/goldman-fears-of-chinese-tigh...
Goldman: Fears Of Chinese Tightening Are Overwhelming Positive Earnings
The bottom line: decent earnings reports can't trump fears about tightening, particularly out of China.
Anyway, given the fact that Bernanke is looking like a weakened lame duck, and everyone is freaking out about China, we maintin our argument that Bernanke has already been replaced on the world stage by the head of the PBOC, Zhou Xiaochuan.
The market may have something to say about interest rates.
The yield on the 10 year US Treasury Bond is today 3.6%.
My bet is that by November, 2010 it will hit 5.5%, driven by the market, no matter what the FED does.
My bet is that this 10 year rate will continue to stair step up to 7.5% by mid 2012, again driven by the market, no matter what the FED does with rates it sets for short term credit.
"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley
I am tired
of these crony firms and their subsidized credit.
_________________________________
Freedom - Peace - Prosperity
A disaster for Goldman,
maybe?
A disaster for the new USD
A disaster for the new USD carry trade. These guys in "the club" get pissed when something screws up their guaranteed (rigged) trading profits.
sucks to be between a rock
sucks to be between a rock and a hard place doesn't it.
“Defiance of God’s Law will eventually bring havoc to a society.” - Dr. Ron Paul
higher rates
Higher interest rates will be trouble for:
+ housing prices - will go down with more expensive mortgage costs
+ credit cards - consumers will be further squeezed with even higher rates
+ Fed fannie/freddie debt - Federal Reserve is pacman eating fannie/freddie housing debt. higher interest rates will cause that debt (bonds) to lose value.
Higher rates may be needed to "save" the dollar, though this will cause more pain in other areas of the economy.
http://FlipFlopRomney.blogspot.com
"consumers will be further
"consumers will be further squeezed with even higher rates"
Good. Credit has been too easy for too long. This is a major reason for the predicament we are in. Encouraging people to use earned money rather than borrowed money (even if it is all funny-money), sounds like a good idea to me.
An economy that uses earned
An economy that uses earned money rather than borrowed money will tend to reward savers. There was deflation in the late 1800s when we used hard money. Hard money makes it difficult to create credit bubbles (though there can still be price bubbles in certain sectors).
Hard money can hinder easy credit.
http://FlipFlopRomney.blogspot.com