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So flower,you are saying the that the Fed will not raise interest rates because the USD and US economy are not strong enough.

Apparantly the longer term interest rates are already rising, however if we use the base rate, no I do not believe the FED will raise those rates for some time, remember they are now effectively minus 2.5%, (depending on how you read US inflation) so to reach our positive 2.5% base rate seemingly can never happen, so what long term (in decades) chance does the USD stand?

 

This something of mixed metaphor from an economic perspective ,something you tend to specialise in.

 

Do you actually think the Fed would raise rates to weaken the USD?

Do I think the FED want to commit immediate suicide? NO of course not they will simply keep manufacturing money until armaggedon strikes--IMO!---so to put it in a nutshell the FED under Greenspan first and now Bernanke have painted themselves into a corner which is going to be virtually impossible to escape from without a near civil war in the US, the population is wedded to easy money with NIL interest rate attached.

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  • 7 months later...

A bit of opinion and analysis from Tyler Cowen and also the FT: neither seem convinced that the ructions in Europe and over and resolved despite the recent period of relative stability.

 

http://marginalrevolution.com/marginalrevo...-on-europe.html

 

So we have elections for the European parliament next month as well as those in Ukraine at the end of May.

 

http://en.wikipedia.org/wiki/Ukrainian_pre..._election,_2014

 

I feel fairly confident that Czar Vlad will be doing his utmost to use the occasions to destablise things at the very least (an overt incursion into Ukraine by Russian forces in the next several months remains a real possibility imo but he may well be able to inflict sufficient pain by way of covert and indirect means).

 

I heard ex-US Secretary of the Treasury, Hank Paulson, the other day asserting that the Chinese told him that during the worst of the financial crisis in 2008 the Russians had suggested to the Chinese that they join together to crash the US financial system but the Chinese much preferred to work with the Americans to stabilise things (I suppose partly because the Chinese were so committed to the international system as it stood then). I would not be surprised if the Russians grasp the opportunity that presents itself now as the northern hemisphere heads into winter and there appears to be a rise in extremist political movements across Europe.

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  • 1 year later...

Last night I sold out of my European holdings - Volkswagen, Red Electrica, and Bpost13b.

The risk of a Euro collapse is getting to big for me to bother chasing further returns.

Been a good run though.

BPOSt was break even, but the other two have been well worth the investment.

Just need now for the AUD to tank against the Euro before I repatriate the mula.

Now just need somewhere or something else in which to invest.

 

Mick

 

 

 

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  • 5 years later...

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