Thursday, September 27, 2007
Another New Low for Dollar
BERLIN (AP) -- The dollar reached yet another low Thursday, its sixth consecutive trading day searching for, and finding, a new bottom against the euro.
The dollar has hit a series of new lows against the euro since the U.S. Federal Reserve cut interest rates by a larger-than-expected half percentage point last week. Disappointing U.S. economic data have underlined the possibility of more cuts.
Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.
Which came first? The Chicken or the egg? It's economics 101 to say that lowering interest rates devalues the dollar. Straight from the text book. But what is really going on here? I predict the dollar would continue to crash - IT DID and IT IS. I predicted the rates on the 10 year notes would go up - THEY DID. I predict mortgage rates would go up. THEY HAVE. All these predicts were accurately made not following the Federal Reserves Statements. They were made following the US Treasury's statements - WE ARE A BROKE COUNTRY thanks to George Bush.
On October 1 something has to happen. Either the debt ceiling will be raised - WHICH MEANS MORE MONEY WILL BE PRINTED IN THE FORM OF TEN YEAR NOTES. THE FLOOD OF NEW NOTES WILL CREATE A SPIKE IN INTEREST RATES. Taxes will be raised. Or spending will be cut.
This is our government for the people by the people. We all know what the shorted sighted lynch mob will only accept.
I believe the devaluation of the dollar is the world's way of saying. "We are not prepare to further our investment in the US Dollar by buying the ten year notes at the current interest rates. We have a serious problem on our hands.
Today I shorted American Express AXP for $59.55 per share. Rates aren't going down - they are going up. A broken country can't change what needs to be change. Rising rates are going to escalate the default rate on debts. I'm staying away from the eye of the storm - home lenders. Who knows what nonsense promises willl be told to America on October 1.
The dollar has hit a series of new lows against the euro since the U.S. Federal Reserve cut interest rates by a larger-than-expected half percentage point last week. Disappointing U.S. economic data have underlined the possibility of more cuts.
Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.
Which came first? The Chicken or the egg? It's economics 101 to say that lowering interest rates devalues the dollar. Straight from the text book. But what is really going on here? I predict the dollar would continue to crash - IT DID and IT IS. I predicted the rates on the 10 year notes would go up - THEY DID. I predict mortgage rates would go up. THEY HAVE. All these predicts were accurately made not following the Federal Reserves Statements. They were made following the US Treasury's statements - WE ARE A BROKE COUNTRY thanks to George Bush.
On October 1 something has to happen. Either the debt ceiling will be raised - WHICH MEANS MORE MONEY WILL BE PRINTED IN THE FORM OF TEN YEAR NOTES. THE FLOOD OF NEW NOTES WILL CREATE A SPIKE IN INTEREST RATES. Taxes will be raised. Or spending will be cut.
This is our government for the people by the people. We all know what the shorted sighted lynch mob will only accept.
I believe the devaluation of the dollar is the world's way of saying. "We are not prepare to further our investment in the US Dollar by buying the ten year notes at the current interest rates. We have a serious problem on our hands.
Today I shorted American Express AXP for $59.55 per share. Rates aren't going down - they are going up. A broken country can't change what needs to be change. Rising rates are going to escalate the default rate on debts. I'm staying away from the eye of the storm - home lenders. Who knows what nonsense promises willl be told to America on October 1.
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