One of the most influential men in the America during the first half of the 20th century, more than some Presidents. Some may know him as the father of Katherine Graham (who inherited his paper Washington Post). Anyway, he was the Chairman of the Federal Reserve during the worst economic period in US history, 1930-1933 (to be fair, the process was well underway when he was appointed in September 1930), one of his lesser accomplishments, or influences.
He [Eugene Meyer] believed that housing construction had large multiplier effects, and that the problems of the Great Depression were in large part due to a housing boom-bust cycle that was the result of real estate speculation. For Meyer psychology was an important determinant of economic activity.
Stock market crash might cause recessions, but not depressions. Housing bust can cause severe recessions and depressions.
"During the 1930, the Federal Reserve had steadily lowered its re-discount rates: from 4 ½ per cent at the beginning of the year to 2% at the end, and finally down to 1 ½ per cent in mid-1931.
Sounds familiar?
This lowering of the rate lead to a bigger monetary crisis!
When the monetary crisis came at the end of the year [1931], the Federal Reserve raised the rediscount rate to 3 ½ per cent The FRS has been sharply criticized by economists for its tight money policy in the last quarter of 1931. Actually, its policy was still inflationary [easy money] on the balance, since it still increased collateral reserves.
Govt intervention and manipulation of the economy is not as easy as people think and doesnt always produce the desired results. Surprise, surprise! We shall find out how well Bernankes manipulation works by the end of 2009.
The depression of 1920 (it was real bad) would have lasted lot longer had the govt and the Fed intervened like they did beginning in 1929. Very few people are told of that fact. The New Deal began with Hoover even though the name was not coined until FDR upped the ante during the campaign.
Ouch!! Interesting though that the suburbs of Philly haven't been affected as much as other places have. Toll Bros. is getting killed in all but its home market. Weird.
You want to see how inflation is moderating? Shocking summary page on Bloomberg with pretty much every article describing record inflation. More rate cuts ahead?
Jas Jain:
So what did all that reading about the Great Depression do for "B-B52" Ben? It seems, according to you, that he might be repeating Meyer's mistake.
Credit-default swap contracts tied to GM bonds were unchanged at 1,013 basis points, according to CMA Datavision in London. The contracts are designed to protect bondholders against default. A rise in the price indicates a decline in the perception of a company's credit quality
now that's Cheap
only 10% more than.... more than? bear bonds?
CR,
Aren't price-rent ratios similar to cap rates on CRE. If so, I think a graph showing and comparing both would be quite illustrative. My guess is finding cap rate data might be tough, though.
It might be an interesting dynamic to see if all of the housing going into default and or held by speculators will end up decreasing not only housing prices but rental prices as well. I can see many people thinking that they could maybe rent below the market prices in their areas as a way of holding off the inevitable day of default. The ratio could remain high until not only house prices decline to their bottom but the occupancy rates climb on new rental (formerly "wink,wink" owner occupied) properties. Where are the numbers on vacancies for rental properties right now?
A weaker U.S. economy will not be enough to restrain the sky-rocketing price of oil because of demand from emerging countries, Dallas Federal Reserve President Richard Fisher said on Tuesday.
barely -- how about that import price report this morning? A few juicy nuggests:
Import prices jumped 1.8% on the month, bigger than the 1.6% increase that economists were expecting. More importantly, the year-over-year rate of import inflation is up to a whopping 15.4% (vs. 14.9% in March). This is the fastest rate of import inflation in the history of the data series, which goes back to 1982.
Ex-petroleum import prices were up 1.1% on the month, and up 6.2% YOY. That's the fastest rise since 1988. Even if you strip out all fuels, you get a 1% monthly rise and a 5.8% YOY increase.
Food and beverage prices were up 0.4% on the month (12.6% YOY), industrial supply prices rose 3.9% (37.3% YOY!), capital goods prices were up 0.8% (2.1% YOY), and consumer goods prices gained 0.2% (2.8% YOY).
Now I certainly don't expect tomorrow's CPI reading to show 15% inflation. But this really is starting to get out of control. I mean, the federal funds rate (at 2%) is a full two percentage points below the most recent CPI YOY change reading. This is essentially the deepest into negative territory that real interest rates have been since the late 1970s.
If the Fed wants to know why commodities and overall inflation are surging, it should look in a mirror. Negative real interest rates fuel asset bubbles and help feed inflationary fires.
mfbn,
A great point. Will rent decrease fall fast enough so that historical ratios are eluded for some time despite the rapid decrease in home prices? I think things only become "normal" when rental vacancies and inventory overhang normalize. Only at that point shoud the rent-price ratio should find its historical norm. We could be waiting awhile...
Yellen and Fischer both out with hawkish inflation comments this afternoon. Fisher is a hawk, but Yellen is a dove, which makes me wonder about a fugly cpi number tomorrow.
A weaker U.S. economy will not be enough to restrain the sky-rocketing price of oil because of demand from emerging countries, Dallas Federal Reserve President Richard Fisher said on Tuesday.
Sounds like he's giving Wall Street the green light to go into another speculative feeding-frenzy.
If the US economy is going to be sabotaged from the inside then it's pretty much game over at this point.
Again, if you buy into Fisher's emerging country demand thesis you also have to buy into the idea that this demand started on the very day that the Fed began easing monetary policy.
And that this period of monetary easing, unlike every other period of monetary easing in the past decade, isn't causing a massive new speculative bubble.
BTW if Fisher is suggesting that the Fed may have to be more restrictive because weakening demand isn't restraining oil prices, then I have to take back my criticism.
Sure it's still a ruse, but at least it's being done for the right reason.
You read me correctly, except that Burn-ass-ke (on the hot metal chair with fire underneath) was appointed to guarantee the Greater Depression. He is on target.
Question to be answered is: Why was a guy who is an expert on the Great Depression was appointed at this time?
"It might be an interesting dynamic to see if all of the housing going into default and or held by speculators will end up decreasing not only housing prices but rental prices as well"
Cobra has been describing his family rental empire's recent experiences in SoFL and how rents are collapsing. Implications are that this phenom should push any eventual RE price stabilization out further and both the top and bottom values in this simple mathematical expression are heading south.
Janet darlin' - no prices fixed in this model except possibly wages.
A great point. Will rent decrease fall fast enough so that historical ratios are eluded for some time despite the rapid decrease in home prices? I think things only become "normal" when rental vacancies and inventory overhang normalize. Only at that point shoud the rent-price ratio should find its historical norm. We could be waiting awhile...
Well historically bubbles lead to over-corrections.
We've had a grossly excessive speculative bubble in housing so one might expect a significant over-correction in the cost of housing in general, though I'd certainly expect it to be more concentrated in home prices as the collapse in mortgage credit pushes more people toward rentals.
And if we get a lot of people moving into trailers and Bernankevilles that's going to slash the price of everything.
Question to be answered is: Why was a guy who is an expert on the Great Depression was appointed at this time?
I have to assume he was put in place through pressures from Wall Street to keep the party going on as long as possible."
As I've said many times, the ONLY policy goal at this time is to push the mess off to January/February 2009 . . . or at the least, until November 2008 . . . at which point, when Obama is elected, they let it all fall down.
Traitorous scumbags are running our country . . . into the ground, that is.
Yes, household consolidation will be a huge factor is what lies ahead. Because household size has shrunk so much in the past few decades, it is one of the few areas left for reducing cost of living.
Hard to cut the cost of fuel. But to counter the rising cost of food, the trend will be to shop at non-union Walmart. And to cut the cost of housing, people will take on renters, roommates, and adult children. Often with their children in tow.
Cobra has been describing his family rental empire's
Janet darlin' - no prices fixed in this model except possibly wages.
barely | 05.13.08 - 2:39 pm | #
Empire? I kinda like that . Seriously,last week a tennant gave notice he bought a house and was moving on the first. I got a call from a interested lady who said "600.00 for a 2/1? I found one for 500.00..." Oh yea, we have pricing ability...
I have been saying this will CRUSH the places bought with small/no downs in the last 5-7 years(Yes,that far back).
Traitorous scumbags are running our country . . . into the ground, that is.
Better make that past tense. It is a fait accompli. For a long time it was covered up by innovation, globalization of the workforce, wives/mothers moving into the labor market, federal deficits, and simple monetary inflation.
Please remember to do your part on inflation. Do not have any personal "inflationary expectations".
You see it is not real inflation that is the problem. It is "inflationary expectations" that is the problem.
So next time you shop please consider downgrading, and not purchasing any thing more than normal quantities, because you think that next time the price might be higher.
Also, if you could cut back on food that would be helpful.
Agree with all about household consolidation; no need to live in Winnebagoville when Mom and Dad have two spare bedrooms and a guest house out back. Or a spare rental unit.
As for adjusting by shopping at Walmart -- I'd think Goodwill Industries. Or, on the other hand, paying for more quality because it lasts longer and is cheaper in the long run.
Our tax rebate is being spent on a new wood stove for the house. Have one already in an outbuilding. With seven cords in the backyard, I figure our savings on heating costs next winter will recoup the entire cost of stove and installation.
Lots of other people will not be as toasty warm. Heating oil will be well over $4/gallon by winter. For a house like ours, that's $800/month.
Heating costs can no longer be borne by the common man in colder climates. The impact will be equal to or greater than the cost of gas.
That plot does not take into account interest rates. Historical mortgage rates were much, much higher. Houses are still overpriced to be sure, but not by as much as the price/rent ratio implies....
If Ben and Co can put a floor underneath the stock market valuations, Why can't they put a floor underneath property prices?
Seems like the wealthy have enough money(access to capital) to purchase all the property in
the USA, rent them for low prices but still make money on the capital gains over time.
Very much like losing money on the dividend yield on stocks but gaining
on appreciation.
I guess one can argue that properties are more overvalued than stocks, but
by how much?
Heating oil will be well over $4/gallon by winter. For a house like ours, that's $800/month.
I have to think that ground source heat pumps are starting to look REAL attractive now... Anecdotally, I heard someone say 4 years for ROI, although that sounded a bit low.
"During the 1930, the Federal Reserve had steadily lowered its re-discount rates: from 4 ½ per cent at the beginning of the year to 2% at the end, and finally down to 1 ½ per cent in mid-1931."
Sounds familiar?
This lowering of the rate lead to a bigger monetary crisis!
"When the monetary crisis came at the end of the year [1931], the Federal Reserve raised the rediscount rate to 3 ½ per cent "
If I recall correctly, the monetary crisis you mention was a run on the US gold reserves (Britain had just capitulated and given up the gold standard). The Fed raised the rate to defend the gold standard and hurt the economy heavily in the process. We don't have that problem anymore, at least, and we might be spared some follies.
I'm currently hedged heavily into Swiss Francs (FXF ETF, to be exact) which has done very well, but I don't want to watch those gains evaporate (and perhaps turn negative) if I don't time the dollar bottoming accurately.
So with that in mind, take a look at the report - specifically:
"Filling station sales also dropped, even as gasoline prices surged. The 0.4 percent decrease last month followed a 1.6 percent gain in March."
So even with the big uptick in prices, total sales were down ... so people are really cutting back on fuel.
Are we at the point where (lack of) consumer demand takes hold and oil finally drops ? If so, does that necessarily imply a dollar strengthening, or can the dollar remain weak even if oil drops back to $80-100 ?
In a bigger picture sense, are we near the inflection point where the money pumping stops and we switch from inflation to deflation as the rate cuts end and we're all left high and dry with no money to support assets ?
--
"If I recall correctly, the monetary crisis you mention was a run on the US gold reserves (Britain had just capitulated and given up the gold standard)."
Peter T,
Yes.
The Fed might have to "defend the dollar" if the low dollar driven inflation becomes a threat. The same thing if that does happen, no?
There are undesirable consequences to easy money policies that might be more serious than the benefits to be derived. That is the lesson, IMO.
"I have to think that ground source heat pumps are starting to look REAL attractive now... Anecdotally, I heard someone say 4 years for ROI, although that sounded a bit low.
EBGuy | 05.13.08 - 3:58 pm | #"
EBGuy,
If you have the property look into it. My Aunt and Uncle in Ohio just put a system in. Less than 50.00 month this winter...And they keep the place 80+ and it is about a 5k sq ft old farmhouse.
So I put off buying until the first of 09? I can do that...prices may be $50 a square foot here in Vegas by then.
--
On the subject of the Fed & Housing...
Eugene Meyer On Housing & the Great Depression
Who is Eugene Meyer?
One of the most influential men in the America during the first half of the 20th century, more than some Presidents. Some may know him as the father of Katherine Graham (who inherited his paper Washington Post). Anyway, he was the Chairman of the Federal Reserve during the worst economic period in US history, 1930-1933 (to be fair, the process was well underway when he was appointed in September 1930), one of his lesser accomplishments, or influences.
He [Eugene Meyer] believed that housing construction had large multiplier effects, and that the problems of the Great Depression were in large part due to a housing boom-bust cycle that was the result of real estate speculation. For Meyer psychology was an important determinant of economic activity.
http://www.lerner.udel.edu/economics/WorkingPapers/2006/UDWP2006-09.pdf
Stock market crash might cause recessions, but not depressions. Housing bust can cause severe recessions and depressions.
"During the 1930, the Federal Reserve had steadily lowered its re-discount rates: from 4 ½ per cent at the beginning of the year to 2% at the end, and finally down to 1 ½ per cent in mid-1931.
Sounds familiar?
This lowering of the rate lead to a bigger monetary crisis!
When the monetary crisis came at the end of the year [1931], the Federal Reserve raised the rediscount rate to 3 ½ per cent The FRS has been sharply criticized by economists for its tight money policy in the last quarter of 1931. Actually, its policy was still inflationary [easy money] on the balance, since it still increased collateral reserves.
Govt intervention and manipulation of the economy is not as easy as people think and doesnt always produce the desired results. Surprise, surprise! We shall find out how well Bernankes manipulation works by the end of 2009.
The depression of 1920 (it was real bad) would have lasted lot longer had the govt and the Fed intervened like they did beginning in 1929. Very few people are told of that fact. The New Deal began with Hoover even though the name was not coined until FDR upped the ante during the campaign.
Jas
Ouch!! Interesting though that the suburbs of Philly haven't been affected as much as other places have. Toll Bros. is getting killed in all but its home market. Weird.
You want to see how inflation is moderating? Shocking summary page on Bloomberg with pretty much every article describing record inflation. More rate cuts ahead?
Bloomberg.com:
Economy
Jas Jain:
So what did all that reading about the Great Depression do for "B-B52" Ben? It seems, according to you, that he might be repeating Meyer's mistake.
had another wonderful entry point on short spu's, up 15g's, and ben comes out and start's talkin about a liquidity fire hose....
i grow weary of this nonsense
Remember this is Janet "I'm sleeping better because housing is recovering" Yellen.
Now she's saying speculation isn't driving commodities higher.
The fact that she feels compelled to say that to begin with says a lot IMO.
"Please keep your seat belts fastened and don't look outside the windows folks. The engines are NOT on fire."
Credit-default swap contracts tied to GM bonds were unchanged at 1,013 basis points, according to CMA Datavision in London. The contracts are designed to protect bondholders against default. A rise in the price indicates a decline in the perception of a company's credit quality
now that's Cheap
only 10% more than.... more than? bear bonds?
CR,
Aren't price-rent ratios similar to cap rates on CRE. If so, I think a graph showing and comparing both would be quite illustrative. My guess is finding cap rate data might be tough, though.
It might be an interesting dynamic to see if all of the housing going into default and or held by speculators will end up decreasing not only housing prices but rental prices as well. I can see many people thinking that they could maybe rent below the market prices in their areas as a way of holding off the inevitable day of default. The ratio could remain high until not only house prices decline to their bottom but the occupancy rates climb on new rental (formerly "wink,wink" owner occupied) properties. Where are the numbers on vacancies for rental properties right now?
A weaker U.S. economy will not be enough to restrain the sky-rocketing price of oil because of demand from emerging countries, Dallas Federal Reserve President Richard Fisher said on Tuesday.
Fed's Fisher: Slower economy won't restrain oil
| Reuters
Fisher issues buy recommendation.
barely -- how about that import price report this morning? A few juicy nuggests:
Now I certainly don't expect tomorrow's CPI reading to show 15% inflation. But this really is starting to get out of control. I mean, the federal funds rate (at 2%) is a full two percentage points below the most recent CPI YOY change reading. This is essentially the deepest into negative territory that real interest rates have been since the late 1970s.
If the Fed wants to know why commodities and overall inflation are surging, it should look in a mirror. Negative real interest rates fuel asset bubbles and help feed inflationary fires.
mfbn,
A great point. Will rent decrease fall fast enough so that historical ratios are eluded for some time despite the rapid decrease in home prices? I think things only become "normal" when rental vacancies and inventory overhang normalize. Only at that point shoud the rent-price ratio should find its historical norm. We could be waiting awhile...
Yellen and Fischer both out with hawkish inflation comments this afternoon. Fisher is a hawk, but Yellen is a dove, which makes me wonder about a fugly cpi number tomorrow.
A weaker U.S. economy will not be enough to restrain the sky-rocketing price of oil because of demand from emerging countries, Dallas Federal Reserve President Richard Fisher said on Tuesday.
Sounds like he's giving Wall Street the green light to go into another speculative feeding-frenzy.
If the US economy is going to be sabotaged from the inside then it's pretty much game over at this point.
Again, if you buy into Fisher's emerging country demand thesis you also have to buy into the idea that this demand started on the very day that the Fed began easing monetary policy.
And that this period of monetary easing, unlike every other period of monetary easing in the past decade, isn't causing a massive new speculative bubble.
BTW if Fisher is suggesting that the Fed may have to be more restrictive because weakening demand isn't restraining oil prices, then I have to take back my criticism.
Sure it's still a ruse, but at least it's being done for the right reason.
--
Joe Klein's conscience,
You read me correctly, except that Burn-ass-ke (on the hot metal chair with fire underneath) was appointed to guarantee the Greater Depression. He is on target.
Question to be answered is: Why was a guy who is an expert on the Great Depression was appointed at this time?
Jas
"It might be an interesting dynamic to see if all of the housing going into default and or held by speculators will end up decreasing not only housing prices but rental prices as well"
Cobra has been describing his family rental empire's recent experiences in SoFL and how rents are collapsing. Implications are that this phenom should push any eventual RE price stabilization out further and both the top and bottom values in this simple mathematical expression are heading south.
Janet darlin' - no prices fixed in this model except possibly wages.
Something i read on a blog -
Start selling when Yellen starts yelling.
A great point. Will rent decrease fall fast enough so that historical ratios are eluded for some time despite the rapid decrease in home prices? I think things only become "normal" when rental vacancies and inventory overhang normalize. Only at that point shoud the rent-price ratio should find its historical norm. We could be waiting awhile...
Well historically bubbles lead to over-corrections.
We've had a grossly excessive speculative bubble in housing so one might expect a significant over-correction in the cost of housing in general, though I'd certainly expect it to be more concentrated in home prices as the collapse in mortgage credit pushes more people toward rentals.
And if we get a lot of people moving into trailers and Bernankevilles that's going to slash the price of everything.
ac
You have it right on Fisher, leverage up and buy that oil boys we got your back.
Question to be answered is: Why was a guy who is an expert on the Great Depression was appointed at this time?
I have to assume he was put in place through pressures from Wall Street to keep the party going on as long as possible.
I.E. so the speculative orgy would end in 1931 instead of 1929.
Last time around they didn't suck every last bit of marrow out of the US population.
They want to make sure and get it right this time.
ac,
As Rob Dawg has noted, household consolidation will likely be a big factor, too. Otherwise, rents will fall with incomes as the economy deteriorates.
Hard to see a bottom when it's a moving target.
"They want to make sure and get it right this time."
Absolutely, that is how they are set up for total government dependency and a total loss of all freedom. The road to serfdom.
"ac writes:
Question to be answered is: Why was a guy who is an expert on the Great Depression was appointed at this time?
I have to assume he was put in place through pressures from Wall Street to keep the party going on as long as possible."
As I've said many times, the ONLY policy goal at this time is to push the mess off to January/February 2009 . . . or at the least, until November 2008 . . . at which point, when Obama is elected, they let it all fall down.
Traitorous scumbags are running our country . . . into the ground, that is.
Yes, household consolidation will be a huge factor is what lies ahead. Because household size has shrunk so much in the past few decades, it is one of the few areas left for reducing cost of living.
Hard to cut the cost of fuel. But to counter the rising cost of food, the trend will be to shop at non-union Walmart. And to cut the cost of housing, people will take on renters, roommates, and adult children. Often with their children in tow.
If you want to go truly tinfoil-hattish, let me ask this...
If it's Ben's job to manage a new Greater Depression, is he supposed to ensure big government or destroy it?
Cobra has been describing his family rental empire's
Janet darlin' - no prices fixed in this model except possibly wages.
barely | 05.13.08 - 2:39 pm | #
Empire? I kinda like that
. Seriously,last week a tennant gave notice he bought a house and was moving on the first. I got a call from a interested lady who said "600.00 for a 2/1? I found one for 500.00..." Oh yea, we have pricing ability...
I have been saying this will CRUSH the places bought with small/no downs in the last 5-7 years(Yes,that far back).
Chris
gary - "at which point, when Obama is elected"
LOL!!
unirealist,
Dovetails nicely with the increase in actual home size, doesn't it? Lots of room to house family & friends.
"That, of course, suggests that further price declines may be needed to bring housing markets into balance."
Or rising rents. Would have been nice to see real rents and real prices on that ratio graph.
Traitorous scumbags are running our country . . . into the ground, that is.
Better make that past tense. It is a fait accompli. For a long time it was covered up by innovation, globalization of the workforce, wives/mothers moving into the labor market, federal deficits, and simple monetary inflation.
Can't hide the crime any longer.
Please remember to do your part on inflation. Do not have any personal "inflationary expectations".
You see it is not real inflation that is the problem. It is "inflationary expectations" that is the problem.
So next time you shop please consider downgrading, and not purchasing any thing more than normal quantities, because you think that next time the price might be higher.
Also, if you could cut back on food that would be helpful.
"It is "inflationary expectations" that is the problem."
The FED's job is to manage inflation expectations, not inflation. Maybe they have bad management over there. Time to step up the BS a notch or two.
Agree with all about household consolidation; no need to live in Winnebagoville when Mom and Dad have two spare bedrooms and a guest house out back. Or a spare rental unit.
As for adjusting by shopping at Walmart -- I'd think Goodwill Industries. Or, on the other hand, paying for more quality because it lasts longer and is cheaper in the long run.
Our tax rebate is being spent on a new wood stove for the house. Have one already in an outbuilding. With seven cords in the backyard, I figure our savings on heating costs next winter will recoup the entire cost of stove and installation.
Lots of other people will not be as toasty warm. Heating oil will be well over $4/gallon by winter. For a house like ours, that's $800/month.
Heating costs can no longer be borne by the common man in colder climates. The impact will be equal to or greater than the cost of gas.
Quickly skimmed thru Ms. Yellen's speech, especially her unconvicing explanation of why commodity prices are surging.
Nary a mention of loose monetary policy (leading to a weaker dollar, and fuelling speculative frenzy in commodities).
These guys have 0 credibility. As Volcker said recently, the Fed and other Central Bankers have completely lost control now.
The current inflationary forces are going to bury the Fed.
That plot does not take into account interest rates. Historical mortgage rates were much, much higher. Houses are still overpriced to be sure, but not by as much as the price/rent ratio implies....
If Ben and Co can put a floor underneath the stock market valuations, Why can't they put a floor underneath property prices?
Seems like the wealthy have enough money(access to capital) to purchase all the property in
the USA, rent them for low prices but still make money on the capital gains over time.
Very much like losing money on the dividend yield on stocks but gaining
on appreciation.
I guess one can argue that properties are more overvalued than stocks, but
by how much?
Heating oil will be well over $4/gallon by winter. For a house like ours, that's $800/month.
I have to think that ground source heat pumps are starting to look REAL attractive now... Anecdotally, I heard someone say 4 years for ROI, although that sounded a bit low.
Jas Jain:
If I recall correctly, the monetary crisis you mention was a run on the US gold reserves (Britain had just capitulated and given up the gold standard). The Fed raised the rate to defend the gold standard and hurt the economy heavily in the process. We don't have that problem anymore, at least, and we might be spared some follies.
I'd like to discuss the bottoming of the dollar.
I'm currently hedged heavily into Swiss Francs (FXF ETF, to be exact) which has done very well, but I don't want to watch those gains evaporate (and perhaps turn negative) if I don't time the dollar bottoming accurately.
So with that in mind, take a look at the report - specifically:
"Filling station sales also dropped, even as gasoline prices surged. The 0.4 percent decrease last month followed a 1.6 percent gain in March."
( U.S. Economy: Retail Sales Advance, Excluding Autos (Update2) - Bloomberg.com )
So even with the big uptick in prices, total sales were down ... so people are really cutting back on fuel.
Are we at the point where (lack of) consumer demand takes hold and oil finally drops ? If so, does that necessarily imply a dollar strengthening, or can the dollar remain weak even if oil drops back to $80-100 ?
In a bigger picture sense, are we near the inflection point where the money pumping stops and we switch from inflation to deflation as the rate cuts end and we're all left high and dry with no money to support assets ?
--
"If I recall correctly, the monetary crisis you mention was a run on the US gold reserves (Britain had just capitulated and given up the gold standard)."
Peter T,
Yes.
The Fed might have to "defend the dollar" if the low dollar driven inflation becomes a threat. The same thing if that does happen, no?
There are undesirable consequences to easy money policies that might be more serious than the benefits to be derived. That is the lesson, IMO.
Jas
"I have to think that ground source heat pumps are starting to look REAL attractive now... Anecdotally, I heard someone say 4 years for ROI, although that sounded a bit low.
EBGuy | 05.13.08 - 3:58 pm | #"
EBGuy,
If you have the property look into it. My Aunt and Uncle in Ohio just put a system in. Less than 50.00 month this winter...And they keep the place 80+ and it is about a 5k sq ft old farmhouse.
Chris
Jay-YELLO needs her on HBO comedy show.
Sorry
barely writes:
gary - "at which point, when Obama is elected"
LOL!!
barely | 05.13.08 - 3:04 pm | #
Thank You...