Today, Federal Reserve Chairman Bernanke spoke about the obvious. The credit markets are still locked up as tight. Banks will not loan each other money. We are in recession. We are going to lower interest rates.
The problem that I see is that Bernanke is busy throwing the dollar out the window in order to save the banks from bankruptcy. This benefits the rich and the folks who own the banks. However, as you can see from the price of food, they are causing great hardship on people without large amounts of money. As people laid off because of the subprime crisis use up their savings, you are going to see a large impact on social services. This, in turn, will cause the state and local governments to raise taxes.
One of my viewers noticed that the cost of his morning bagel has gone up by 25%. I've noticed food prices in general are more expensive. Food is a very good investment option. The purchase of long term food storage will allow you the flexibility to adjust to the new economic situation.
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2 comments:
Like your common sense analysis. On this you are right. The dollar is being sacrificed for liquidity. However, I don't blame the fed too much since they have backed themselves into this corner and have to prop up the banking system at all costs. Lose confidence in the banks and that would definitely send us into a deep depression. I think a good deep recession will be good for the country in the long run. However, I don't think it will be deep enough or long enough to ring out the excesses of our society on all levels.
Guday John,
Interesting article in the AUstralian Newspaper ( I will get to the point)....Centro was put in trading hold on suspicion it will go belly up ( iN other words it is in the shit big time)...why should that interest you, well Centro owns billions of Dollars worth of US SHopping centres. The reason they are in trouble is that they(Centro) could not refinance their short term debt obligations, about $3.5 Billion US.
If you can not refinance US shopping centres, what does that say about US consumer confidence.
Unfortunately for me most of the debt is owed to Australian banks... Well guess what the blood suckers here did, they( about 5 of them) all raised interest rates similtainiously( same time that Centro went Feral), no directions from our FED.
Misery loves company.
Anyway, back to the topic at hand....Bernake's speech the other day was 3703 words long essentially blaming the banks for all the troubles and saying in Fed speak were all going to pay for their arrogance. But here is what is interesting do you remenber late last year Bernake promised the Fed to the rescue 2 other times the fist time... the market rallied for a couple of weeks, next time the market rallied less before the pull back and now this time the market advanced 1 day only.....the Asain markets went the other way.....so Bernake speak====>Bullshit the market is starting to learn,
Regards your
Aussie Mate Mark
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