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US rate cuts: Like a blow to the head
The contrast between Tuesday's meeting result and the sunny optimism of the previous Fed meeting on August 7 is breathtaking; it is far and away the most ominous portent of the future prospects of the US economy since the current "subprime crisis" broke into the market's consciousness earlier this year. Comparing the results of the August meeting with Tuesday's is like going to the doctor wanting to have a hangnail removed and having the physician start his conversation by asking how you feel about cremation.
To me, the most remarkable thing about these events is that they demonstrate the breathtaking disregard that US economic policy makers have regarding the value and fate of their own national currency. Richard Nixon-era secretary of the treasury John Connolly, speaking to European economic officials, once said that the US dollar was "our currency, but your problem". The country could get away with that back in the early 1970s, when the US was the world's biggest lender; now that this situation is reversed, and the country must borrow $2-3 billion from foreigners each and every day just to feed its overconsumption addiction.
CNBC's Maria Bartiromo was so gushingly giddy in her coverage of the rally that you would have thought that Starbucks had opened a coffee stand in her electroshock therapy suite.
What Ben Bernanke is saying with his sharp interest rate cuts, and what the nation is affirming its approval of with the orgiastic stock market response that followed, is that it continues to hold no other value higher than the pleasure to be attained through its own excess consumption. In depreciating the value of the currency it uses to pay China for its goods, the US is telling China that it has no intention of paying China the full value for what it buys from it; that would be unacceptable, it would mean that there would be less money to buy even more stuff.
This article was forwarded to me by a friend. I have nothing more to add. I'd argue that the painful truth and sarcastic tone cuts plenty deep.
December 20th COVID Update: COVID in Wastewater Increasing
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[image: Mortgage Rates]Note: Mortgage rates are from MortgageNewsDaily.com
and are for top tier scenarios.
For deaths, I'm currently using 4 weeks ago for ...
14 hours ago
5 comments:
A sprinkling of hysteria as Americans go crazy for cupcakes
http://news.independent.co.uk/world/americas/article2984793.ece
Here you go Mark the next big, thing get'em while there hot.
Kevin
Well if you lend a fool money, you should expect to be parted from it when they are (sooner or later) parted from.
Did the Chinese never think that the US trade balance would have to rebalance?
Kevin,
I think your link is broken. I'm salivating over cupcakes though!
russell120,
I'm thinking 1.3 billion people would work for peanuts if needed, but alas we seem to be offering them just the shells these days.
Kevin,
Found the article manually and when I compared the url it was the same one you gave me. Apparently the site was down for a while (or my two attempts to use your link both failed). It works now though.
I convinced a friend in college to put an entire Hostess cupcake in his mouth. I told him it wouldn't fit. He proved me wrong.
I then said, "Says elephant." It was an obscure Monty Python reference. The cupcake began to emerge a few crumbs at a time until it was nearly all out. I still conceded he got it all in there though, lol.
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