Federal reserve - half point rate drop
Bearing in mind I know NOTHING how this crazy world works, I'll accept the opinion that: Lower the federal fund rate causes inflation and devalues the dollar value compared to other currencies.
Best guesses were that the fed would reduce the rate a quarter point, that a half point meant things are worse than expected, and so the half point decision is a CALL to the world that the U.S. Dollar is a bad investment, and the only reason any foreigner would have to invest in our currencies is the reality that every other major currency is also inflating itself away.
So we're going to blow the bubble again and see what we can blow up next to keep our fragile economy humming with corruption and senseless risk. Rather than taking our medicine and taking a few weeks in bed, we've taken drugs that dull the pain so we don't care any more and keep doing the unhealthy things that got is here in the first place.
I have a coworker, a Canadian, still paying off his student loans in Canadian dollars, and grumping daily that his salary keeps dropping in value, compared to his debt.
Imagine your house mortgage was in Canadian dollars, and the U.S. dollar dropped 10% in 3 months, and your debt just went up by 10%. Your $200,000 mortgage is now worth $220,000, OR perhaps your wages were just cut by 10%.
BUT you and I don't see this when the dollar weakens. You and I, at least if you actually OWN savings rather than debt, we don't realize our accounts just dropped 10%.
Crazy stuff, and I won't be scared, since nothing I can do, and I've done all I can. Inflation is coming and we don't see it. The stock market might double in the next 5 years AND the U.S. dollar might be worth 1/4th as much in the same period - happy returns?! Hyperinflation anyone? The only protection the U.S. has is that no one else has found a trusted replacement to the dollar, but they'll be trying.
I think we deserve what we get, and perhaps there is no solution for us but inflation. People don't want to pay taxes, to pay for services received so we borrow and inflate away the costs.
I have to wonder what crazy thing will happen next in this soap opera? Do I want to end now, or shall we dance a few more times before everything of our failure becomes apparent?
Best guesses were that the fed would reduce the rate a quarter point, that a half point meant things are worse than expected, and so the half point decision is a CALL to the world that the U.S. Dollar is a bad investment, and the only reason any foreigner would have to invest in our currencies is the reality that every other major currency is also inflating itself away.
So we're going to blow the bubble again and see what we can blow up next to keep our fragile economy humming with corruption and senseless risk. Rather than taking our medicine and taking a few weeks in bed, we've taken drugs that dull the pain so we don't care any more and keep doing the unhealthy things that got is here in the first place.
I have a coworker, a Canadian, still paying off his student loans in Canadian dollars, and grumping daily that his salary keeps dropping in value, compared to his debt.
Imagine your house mortgage was in Canadian dollars, and the U.S. dollar dropped 10% in 3 months, and your debt just went up by 10%. Your $200,000 mortgage is now worth $220,000, OR perhaps your wages were just cut by 10%.
BUT you and I don't see this when the dollar weakens. You and I, at least if you actually OWN savings rather than debt, we don't realize our accounts just dropped 10%.
Crazy stuff, and I won't be scared, since nothing I can do, and I've done all I can. Inflation is coming and we don't see it. The stock market might double in the next 5 years AND the U.S. dollar might be worth 1/4th as much in the same period - happy returns?! Hyperinflation anyone? The only protection the U.S. has is that no one else has found a trusted replacement to the dollar, but they'll be trying.
I think we deserve what we get, and perhaps there is no solution for us but inflation. People don't want to pay taxes, to pay for services received so we borrow and inflate away the costs.
I have to wonder what crazy thing will happen next in this soap opera? Do I want to end now, or shall we dance a few more times before everything of our failure becomes apparent?
posted by Ares Olympus at 8:09 PM
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