Bernake Speaks, Pm Rises

You can bash the Fed all you want, but the truth of the matter is they don't have the ability/tools to correct the situation we're in now. It's worse. Political solutions are needed.

God call, in the end they will save their own hides, before they ever consider anyone else's position....

Raising the interest rates has three effects:

1. The U.S. dollar becomes more attractive to invest in, because you get a better return on your investment,
2. Cash investments become more attractive than shares, so a fall in share prices result.
3. The bullion price will fall a bit in dollar terms, because you can buy more bullion for your dollar, because the dollar is more valuable.

If you are in control of the nomination of interest rates, you have at least some influence on the value of the dollar relative to other currencies, and you have at least some influence on the price of shares. That may be OK for the Government, if they own some shares, as I believe they still do, as a result of the bailout, in the wake of the GFC.

If the Government still has a large shareholding, a very nice profit can be now made, with the Dow now in a reasonably healthy position. That profit is in the taxpayer's favour. Bonus!

I don't think the Feds are worried either way by the bullion prices, they just appear to be some sort gauge to measure things with. The overall size of the U.S. economy is hundreds of times bigger than the U.S. bullion reserves.

I have NEVER studied economics, it just seems to be obvious to me.

Heard that one time too many from a college prof. I asked if that was why he shaved the edges.

Oddly enough, he never mentioned it again.

I think, considering the health care grab of was over 2000 pages, that a more simple system in courts could be made where the person suing gets court costs, medical bills paid, wages if missing work, and a percentage of money for severity of damage. Total disability makes for the most return, limb loss would be another high return, however, something like the tip of a finger would bring a decent return, but nothing like millions. A surface burn of hot coffee, or someone tripping over a wrinkled carpet would be a mandatory verdict of the sue-er (sewer?) being laughed out of court for thinking that a typical human error entitles them to be a millionaire at the expense of everyone else.

Don't get me wrong, I realize there ARE legit suing cases. But our system handled them rather nicely until the slothful, greedy, get rich quick, no morality or personal responsibility mindset became popular. It is helping to kill our economy and freedoms.

And on the note of the economy as relating to coins and currency, for the first time in my life the Canadian dollar is worth more than the US dollar. I remember the day I got 1.50 Canadian for 1.00 US exchange. I used to go to Canada to shop just for this reason. The amazing thing is that the economy on both sides of the border was pretty decent. It seems the only thing that the dollar values shifting did was determine how many people thought it was worth it to cross the border to save on shopping.

Something else got me - when Star Wars Episode VI came out, it was 15.00 at Walmart in Canada and 15.00 in the US WalMarts, The exchange rate at the time meant if I bought it in Canada I was paying only 10.00. So the US company, Walmart obviously set prices to make a profit in their Canadian stores. When a Canadian spent the equivalent of 10 US dollars they got the DVD and Walmart made money. So think of how much they were making off people in the States who were paying the equivalent of 15.00 US dollars for the same DVD!

Hmmm....

You get 800% more on the AUD. $4.50 vs 0.50.

Yes and in the US$ as well. Oh, silly me! What was I thinking?! Mustn't do that.

The Fed has a long history of coming to the party too late and then staying far too long. They need to raise US interest rates slowly but surely and they need to start NOW. By the time that they do get around to doing this, we will be up to our eyeballs in debt AND inflation. They will, of course, then go over-board in the other direction until that also becomes blatantly obvious, even to them.