World economy talk

[tidus1203]

I guess some experts are also sharing my view that the Fed is misrepresenting the real inflation figures. And inflation is much higher than what the Fed is saying. As I said before you only need to do your own shopping to realize that its impossible that the Fed's inflation numbers are accurate.

http://money.cnn.com/video/#/video/n...Feb28.cnnmoney

[creepy]

let me explain the way the US Fed works, then. the only way the Fed can create new money (increase the money supply) is TO ISSUE NEW DEBT - in the form of new T-Bills to be sold to banks.

Wow. Before you try to explain anything to other people, may I suggest you consult a college textbook first?

Central banks reduce (R-E-D-U-C-E) money supply when it issues debt.

Let me repeat, central banks reduce money supply when they issue debt.

the Fed cannot simply print money and throw it out of a helicopter, as those talking heads and bloggers allege.

if the Fed is printing money like crazy, then the value of the USD will decrease, right? which means the US economy will see a really high inflation rate. Econ 101, right? well, i looked up the January inflation rate (US CPI), and came up with....2.2%. i looked up the full year inflation for 2007 and got...2.8%. a bit high for my taste, but hardly hyperinflation, no?

Have you seen any statistics on M3/money supply for the U.S. recently?

[empy]

ok i'm back :sun:

creepy - thank you for the correction. i did realize my mistake when i reread my post this morning and tidus' reply good for you. can you show me how to spell "reduce" again?

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re: inflation - to be honest, i have not noticed a significant or unusual increase in good prices here in Florida - even in education and health care (although health care has always been ridiculous - but that's a topic for another thread). but i just read an article last night that inflation for january was its highest in the trailing twelve months. so maybe there's something there...although this coincides with the Fed cutting rates, so inflation for this period was partially due to that. so i would like to see february's trend before reacting. if we cannot believe the government's figures, then i would like to see true data instead of rhetoric

but there's no denying the trend for the USD is worsening. but it's difficult to find somewhere to hide these days. the FTSE is also down, as are the Asian composites (even the hot China and India indices).

[tidus1203]

There are always places to hide you just have to know where it is.... As I said I have been hiding in gold, silver, and foreign currencies and they have all worked. I do have some foreign stocks and I have to say I am also getting hit there but I am faring much better than people (and thats a lot of people since when people think investments only stocks and bonds come into mind) who have all their money in US paper assets.

The major theme this year and most likely in 2009 is INFLATION. Invest with that in mind and you should do very well....

[empy]

There are always places to hide you just have to know where it is.... As I said I have been hiding in gold, silver, and foreign currencies and they have all worked. I do have some foreign stocks and I have to say I am also getting hit there but I am faring much better than people (and thats a lot of people since when people think investments only stocks and bonds come into mind) who have all their money in US paper assets.

agreed. my saving grace this year has been my Pacific Rim ex-Japan securities, oil and my Mediterranean/Middle East fund (which is also oil-heavy).

may i ask you what your "home" currency is? the reason i ask is that if you are a dollar-earner like i am, then investing in the rupee, euro or gbp becomes very attractive. but if you are earning pesos or euros, then the upside is a little more limited, i have to believe.

[uls]

but there's no denying the trend for the USD is worsening. but it's difficult to find somewhere to hide these days. the FTSE is also down, as are the Asian composites (even the hot China and India indices).

ummm... Brazil?

[tidus1203]

I live in the Philippines so I earn Pesos. But konti lang pesos ko in contrast to my foreign currencies as a proportion of my total paper asset.

[froshie1]

pareng tidus, i can't see you in live anymore what happened? di ka na ba gamer? si frosh ito ng PEX. anyway pre, saan ba pwedeng makabili ng Euro? Iyong mga no questions asked or kung meron mang questions eh hindi iyong matinding justifications ang kailangan.

[tidus1203]

pareng tidus, i can't see you in live anymore what happened? di ka na ba gamer? si frosh ito ng PEX. anyway pre, saan ba pwedeng makabili ng Euro? Iyong mga no questions asked or kung meron mang questions eh hindi iyong matinding justifications ang kailangan.

Gamer parin ako kaso banned na ako so you know what that means....

I bought my Euros and my other foreign currencies (Aussie Dollar, Swiss Franc, etc...) at a foreign bank outside this country. I won't give details anymore beyond that. Sa Philippines I am not 100% sure where we can buy Euros the proper way I do know a black market trader in Binondo but its not huge amounts and malaki ang spreads pero cash for cash talaga.

[tidus1203]

Now more than ever, me must get out of the US Dollar. Helicopter Ben has again flown and thrown money at the amount of $200B to bail out troubled financial institutions by accepting their toxic subprime securities as a collateral. The equity markets might see this as a good thing I don't think it will be good in the long run especially on the inflation picture. Gas prices, food prices are all up and the supply is getting limited and now to add $200B of new money to chase that limited supply thats what we call inflation folks