I'm putting the dollar on sell until Fed Bernanke can prove he's brave enough to face the facts, and make America great again.
Oh boy... if the rest of the world gets it, why don't we? We need to raise rates to avoid a Japan. Who cares if people who were meant to rent in the first place lose their homes? Let 'em. So we have a housing market slow down, and we go back to square one. BIG DEAL. The whole world experienced a housing boom. I'd rather go back to square one right now, than slooooooooooooooooooooooooowly get dragged back.
Why does the rest of the population have to suffer by losing real returns? Let these asset management companies fail for the bad bets they greedily made in the first place on huge debt. Carlyle Capital borrowing $32 for each dollar of equity they had? They deserved it for irresponsible borrowing. Let these people with 500 FICO's go back to their old apartments. There's a BIG DIFFERENCE between buying a property and owning a home. The idea of meant to rent genuinely does go a long way. In our frame of reference, we saw the DJIA move up from 11,000 to peak at 14,000 looking through the lens of the dollar. In reality, when we look through the lens of the euro, the DJIA has been flat for years.
The real problem is the US Fed can't just drop rates each time we're afraid of recession to encourage employment so companies can coerce Americans to buy more crap only to overextend ourselves. That's why we're in a recession (yet again). Instead of using the extra cash flow the gov't provided us to be more productive, we just bought more crap like Garmin GPS device. Seriously? I visit the CVS everyday, I don't need a GPS to tell me where it is. We should drop the lever on rates to leverage meaningful technological advances, not useless widgets like a GPS device. Now, we run the risk of other countries dominating because they have the capacity to grow when we've overextended ourselves.
American companies reaching maturity need to create technology services and more productive machinery for the world to buy so we can remain competitive. R&D R&D R&D. And government needs to encourage inventive, foreign companies to make a new base in America. Give 'em tax breaks. I hear they really like those. I feel like Americans are all about staying American, but that closed-mindedness makes our country poorer everyday. I thought we were entrepreuners in a brave new world, not fearful lemmings living in a terror dome. That's why I left my country and renounce my old citizenship to be a United States citizen.
And it starts with my kids. When I was younger, my dad used to ask me every day, every day, seriously, every day, "Did you think of 3 things you think would make people more productive today?" And I probably recycled many ideas over and over along the way, although my dad sooner or later got me thinking in a way of how we can help ourselves be more productive to the world. It really is the key to America not being displaced by...
China will only be the super power in 2050 like the BRIC story predicts as long as they keep making cheap stuff for the world, and America doesn't capitalize on the newest technological wave. In the long-run, as corny as it sounds, we have one competitive advantage: ingenuity. And our best strength is being brave enough to be the first mover.
Life quality advances will always trump making stuff cheaper and faster any day.
Norway central bank governor says inflation still an important target for banks
03.07.08, 4:04 AM ET
OSLO (Thomson Financial) - Norway's central bank governor Svein Gjedrem said that amid the current global financial turmoil, central banks needed to remain closely watching tackling inflation as a top priority.
He told a conference of central bankers in Oslo -- who included German Bundesbank President Axel Weber and US Federal Reserve Governor Frederic Mishkin -- that interest rates had been held too low for too long.
'We have been hit by massive and long-lasting positive supply shocks thanks to globalisation,' Gjedrem said.
'To accommodate a higher growth potential and to maintain the nominal anchor, central banks worldwide for a long period held short-term interest rates well below what can be regarded as a normal level,' he said.
'Low and stable inflation is the best contribution monetary policy can make to growth and macroeconomic stability.'
Gjedrem said a new, globalised world did not change that paradigm.
$22.93 (03/11/08)
