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#1
09-10-2007, 07:03 AM
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I think the federal rates are going to go up.
I know it sounds like a doom and gloom idea but it appears that cash has become king in the market once again. There is SO MUCH DEBT out there. More debt than most people can imagine. Can somebody prove me wrong? Can somebody please tell me why overwhelming and unmanageable debt can somehow lead to economic growth in the long term? Well I CAN NOT. And because I see this debt monster to keep growing, the only natural thing to develop in the coming months is that people will do ANYTHING for cash. What happens when people DEMAND cash? Well you're able to charge them higher interest rates or else they face default.
Look at countrywide. Offering the best rates in the United States on 1-year CDs. I don't think it's a fluke. I think it's a signal for the direction that the market is heading. You either LOSE EVERYTHING or you accept the fact that you're going to have to pay out a high interest rate to survive in this market. Cash is becoming king we have lived with so much dollar inflation in the past decade and more, I have the gut feeling that these things work in cycles and eventually we will have to STOP INFLATION and thus... interest rates will go up. 
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#2
09-10-2007, 09:41 AM
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Re: I think the federal rates are going to go up.
CRAMER just joked about this on CNBC.............good call.
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#3
09-10-2007, 10:01 AM
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Re: I think the federal rates are going to go up.
[ QUOTE ]
I know it sounds like a doom and gloom idea but it appears that cash has become king in the market once again. There is SO MUCH DEBT out there. More debt than most people can imagine. Can somebody prove me wrong? Can somebody please tell me why overwhelming and unmanageable debt can somehow lead to economic growth in the long term? Well I CAN NOT. And because I see this debt monster to keep growing, the only natural thing to develop in the coming months is that people will do ANYTHING for cash. What happens when people DEMAND cash? Well you're able to charge them higher interest rates or else they face default. Look at countrywide. Offering the best rates in the United States on 1-year CDs. I don't think it's a fluke. I think it's a signal for the direction that the market is heading. You either LOSE EVERYTHING or you accept the fact that you're going to have to pay out a high interest rate to survive in this market. Cash is becoming king we have lived with so much dollar inflation in the past decade and more, I have the gut feeling that these things work in cycles and eventually we will have to STOP INFLATION and thus... interest rates will go up. [/ QUOTE ] So what do you recommend? Stay in cash I guess. BTW bond market says you're wrong.
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#5
09-10-2007, 10:36 AM
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Re: I think the federal rates are going to go up.
CASH is king boys.........
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#6
09-10-2007, 12:01 PM
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Re: I think the federal rates are going to go up.
Level?
You do know that the fed funds rate is set by Ben Bernanke and the Fed governors, and not by market forces, right?
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#7
09-10-2007, 03:59 PM
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Re: I think the federal rates are going to go up.
[ QUOTE ]
Look at countrywide. Offering the best rates in the United States on 1-year CDs. I don't think it's a fluke. [/ QUOTE ] They have to pay high rates in order to find people stupid enough to put money in their banks. They are broke and they are desperate for suckers to fund their business. I wouldn't leave one penny in their banks. They are going bust.
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#8
09-10-2007, 04:28 PM
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Re: I think the federal rates are going to go up.
[ QUOTE ]
[ QUOTE ] Look at countrywide. Offering the best rates in the United States on 1-year CDs. I don't think it's a fluke. [/ QUOTE ] They have to pay high rates in order to find people stupid enough to put money in their banks. They are broke and they are desperate for suckers to fund their business. I wouldn't leave one penny in their banks. They are going bust. [/ QUOTE ] Actually deposits in the Countrywide Bank are federally insured up to $100,000.
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#9
09-10-2007, 05:50 PM
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Re: I think the federal rates are going to go up.
[ QUOTE ]
Level? You do know that the fed funds rate is set by Ben Bernanke and the Fed governors, and not by market forces, right? [/ QUOTE ] I do. Do you know the the Fed funds rate is a tool the Federal Reserve uses to make sure they have the largest profit margin in the market they are in? As cash becomes more and more in demand the Fed will raise their rates to take advantage of people who are in desperate need for the cash and have no other options.
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#10
09-10-2007, 06:37 PM
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Re: I think the federal rates are going to go up.
No... the goal of the Fed is not to make profits on their lending, it's to guide the economy between recession and inflation by adjusting short term rates appropriately.
I will bet you any amount of money at 100:1 that the Fed does not raise rates at their next meeting.
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