The FED--savior or magician?
 

We all recall the Nasdaq mania of the late 1990's. Why not?? Joe Six-Pack was DRUNK on cheap oil. Lots of disposable income meant lots of happy spending. ------ When crude doubled in under year in 2000 which POPPED the Tech bubble, a recession was at hand. ----------- Joe six pack hates recessions, so the Fed dropped interest rates that year, and commenced to print money like a mad. --------- WALLA!!! No more correction. People found the low interest rates meant house refi's were a new source of income. --------- Then along came Sept 11. Reccession rears its ugly head, so the Fed jumps in to save the day. -------- Slashing interest rates and doubling the total money supply. --------------- PRESTO!!! --- No more recession. ----------------------------- Politicians expanded government spending at unprecendented levels and printed funny money to pay for it all. -- Meanwhile Joe-Sixpack spends more and more cuz the signals from the Fed tell him to. ------------------------------------------- All the housing bubble today amounts to is a POST PONING of the true correction that SHOULD have happened after the Tech crash. ---------- This current day of reckoning will ALSO GET POSTPONED. -------- The Fed will drop rates and print more money in the face of rising oilflation and get away with it. ----- For awhile. Ultimately the postponed correction will become a complete and utter collapse of historic proportions because the market was never allowed to function for the last 8 years.

Re: The FED--savior or magician?
 

[ QUOTE ]
When crude doubled in under year in 2000 which POPPED the Tech bubble, a recession was at hand.

[/ QUOTE ]

Crude didn't pop the tech bubble in 2000, 2000 did. The massive tech spending to accomodate the year 2000 was over. Also, the massive Internet build-out got built out.

[ QUOTE ]
Then along came Sept 11. Reccession rears its ugly head, so the Fed jumps in to save the day. --------

[/ QUOTE ]

The terrorist attck had nothing to do with it. The economy was already on it's way down. 9/11 just hurried it along to where it was going anyway.

[ QUOTE ]
The Fed will drop rates and print more money in the face of rising oilflation and get away with it. ----- For awhile.

[/ QUOTE ]

There's no guarantee the Fed will drop rates. There's actually no need right now because rates are plenty low all by themselves.

Re: The FED--savior or magician?
 

[ QUOTE ]
We all recall the Nasdaq mania of the late 1990's. Why not?? Joe Six-Pack was DRUNK on cheap oil. Lots of disposable income meant lots of happy spending. ------ When crude doubled in under year in 2000 which POPPED the Tech bubble, a recession was at hand. ----------- Joe six pack hates recessions, so the Fed dropped interest rates that year, and commenced to print money like a mad. --------- WALLA!!! No more correction. People found the low interest rates meant house refi's were a new source of income. --------- Then along came Sept 11. Reccession rears its ugly head, so the Fed jumps in to save the day. -------- Slashing interest rates and doubling the total money supply. --------------- PRESTO!!! --- No more recession. ----------------------------- Politicians expanded government spending at unprecendented levels and printed funny money to pay for it all. -- Meanwhile Joe-Sixpack spends more and more cuz the signals from the Fed tell him to. ------------------------------------------- All the housing bubble today amounts to is a POST PONING of the true correction that SHOULD have happened after the Tech crash. ---------- This current day of reckoning will ALSO GET POSTPONED. -------- The Fed will drop rates and print more money in the face of rising oilflation and get away with it. ----- For awhile. Ultimately the postponed correction will become a complete and utter collapse of historic proportions because the market was never allowed to function for the last 8 years.

[/ QUOTE ]

this is hilarious.

i think you meant voila?

wow.

Barron

Re: The FED--savior or magician?
 

No

Walla, walla

Re: The FED--savior or magician?
 

Re: The FED--savior or magician?
 

[ QUOTE ]
Ultimately the postponed correction will become a complete and utter collapse of historic proportions because the market was never allowed to function for the last 8 years.

[/ QUOTE ]

i dont think they will ever let it amount to this. they claim they fear inflation in all their reports but in reality they fear deflation much worse. follow their actions, not their words.

i think this correction will be a hard one but not a total depressionary collapse, then one the market has reached some semblance of equilibrium they will drop rates and inflate away again.

Re: The FED--savior or magician?
 

[ QUOTE ]
No

Walla, walla

[/ QUOTE ]

nice try, but your use of PRESTO!! a few lines later in the same context indicates you mean voila and embarrasingly mispelled it [img]/images/graemlins/tongue.gif[/img]

Barron

Re: The FED--savior or magician?
 

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Re: The FED--savior or magician?
 

My thoughts on the subject recently:

If the money supply shrinks, which I assume would happen if the housing market crashes. The loans speculators bought real estate with created a ton of money inflating the money supply and the dollar goes down. Everybody thought they were gonna get rich and spent their money helping the economy. As these loans go in to default the money supply will sharply fall unless the government comes up with something to create and thus spend a lot money on (like a social program or a war). I speculate that something big will have to change, I am thinking a steep recession. I do think the OP does have a point, if the government runs out of things to motivate people to spend on, there will be an inevitable crash.

Re: The FED--savior or magician?
 

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