Hiding Bear Posted October 14, 2004 Author Report Share Posted October 14, 2004 The Fed added about $1.75 B to the repo pool, in line with current trends. It's been four months now since Fed members first starting talking how high oil prices were only temporary and were set to come down. Now that prices are more than 30% higher, the Fed and administration ? if they stay anything ? still mostly say ?stay the course? and repeat what they said about oil before. However the cumulative present and future damage to economy of US caused by energy price shock will be substantial. The Fed is now just a few weeks away from its third significant, faster acceleration of the monetary base within a year to offset the impact of high oil prices ? which will be made under the guise of a hurricane related soft patch or headwinds of energy price inflation. (No, they won?t say the headwinds of a hurricane slowed the economy! ) The goal of the Fed will be to begin the process of monetizing the energy price increases. Simply put - monetization usually refers to the Fed buying something in exchange for fiat dollars - which it issues out of thin air. In this case they won?t actually buy oil, but buy Treasury securities instead to do the job of monetization. [Regular forum readers can skip the next three paragraphs]. The Fed besides controlling one interest rate, the Fed Funds rate, also controls the monetary base in attempts to change the level of the money supply and liquidity (the availability of money) in the economy. The monetary base is mostly 'repos' and Treasuries the Fed buys. The Fed however can buy most any asset it wants; hence it may monetize most anything. It is already buying securities if the GSEs, which are not government guaranteed securities. Usually a higher monetary base will induce the money supply to increase, but that is a somewhat indirect and imperfect mechanism. Money supply expansion in general leads to more inflation. This new wave of inflation is acceptable to the Fed - even if short term rates get nudge up a few notches to publicly show how they are "fighting inflation". Inflation acts as a hidden tax and redistributes the pain of rising prices (oil) or failing assets (hedge funds) from specific groups most affected by energy price increases to all holders of dollars. Remember that large holders of dollars are Asian central banks, which apparently get no vote in this process. Asian savers as well as American ones are going to help pay for the energy intensive way of life of the American consumer. Link to comment Share on other sites More sharing options...
EddieBear Posted October 14, 2004 Report Share Posted October 14, 2004 Anybody know how to get NYMEX crude price on Ameritrade?? A co-worker has Ameritrade but we can't figure out how to get realtime crude price.? I found a free source on the Web but it has a 30-minute delay. TIA Free streaming quotes for currencies, metals, oil: http://forex-markets.com/javacharts.htm Very cool! Many thanks for the link. I get a bunch of Java errors and no charts, but Tanks anyway, Rog. Anybody know how to get live crude price on Ameritrade? Link to comment Share on other sites More sharing options...
Pee Brain Posted October 14, 2004 Report Share Posted October 14, 2004 If you want a good book on Chaos and the markets, one that is a tad beyond the trivial but if you take the time with it can bring rewards it is CHAOS and ORDER in the Capital Markets by Edgar E. Peters. $65.00 also published by Wiley I have the second edition 1996 - don't know if it has been updated. Good news =it's in Doc's Bookstore for 37.50. Do a search on "Chaos and Order" Thanks Mars - I will check it out. OT/ i went to a "townhall" debate/discussion at my sons local high school. some the students were profoundly well informed, one Iranian kid quoted "The Economist" at length and had a very enlightened approach. the students were overwhemingly liberal as were the teachers that spoke - understandable. the one thing that struck me is the lack of optimism - i was in 9th grade in 1969 and the 1960's were about opimism, change and making things better - there was so much energy. today's students do not exhibit the same optimism for change and upon reflection, no longer do i. im going to change that in myself and children, i refuse to let whatever evil, selfish force that is running this country continue. this is the last election that i will be a spectator to - im gonna get involved. Link to comment Share on other sites More sharing options...
Guest Posted October 14, 2004 Report Share Posted October 14, 2004 Next up on Powerlunch: The $100 Philly Cheesesteak Sandwich and Elliot Spitzer filing suit against the INSURANCE INDUSTRY for a scheme to manipulate the insurance bidding process (bid rigging/fraud). Link to comment Share on other sites More sharing options...
soup Posted October 14, 2004 Report Share Posted October 14, 2004 Sorry, no more politics from me. Link to comment Share on other sites More sharing options...
Guest Posted October 14, 2004 Report Share Posted October 14, 2004 oil up .96 edit... Oil up $1.01 Link to comment Share on other sites More sharing options...
K Wave Rider Posted October 14, 2004 Report Share Posted October 14, 2004 Crude nudder new all time high Link to comment Share on other sites More sharing options...
Guest libertas Posted October 14, 2004 Report Share Posted October 14, 2004 Meanwhile, the sheeple cling fearfully and desperately to their tech stocks, hoping for the return of the tech boom. Link to comment Share on other sites More sharing options...
RockLedge Posted October 14, 2004 Report Share Posted October 14, 2004 Crude new all time high And now why we know why the sudden reversal yesterday.... Pay attention to the API numbers, forget what the goobermint says. Better top of your tanks folks.. gasoline is going to launch much higher in price, the gloves are coming off. Link to comment Share on other sites More sharing options...
Jimi Posted October 14, 2004 Report Share Posted October 14, 2004 If you want a good book on Chaos and the markets, one that is a tad beyond the trivial but if you take the time with it can bring rewards it is CHAOS and ORDER in the Capital Markets by Edgar E. Peters. $65.00 also published by Wiley I have the second edition 1996 - don't know if it has been updated. Good news =it's in Doc's Bookstore for 37.50. Do a search on "Chaos and Order" Thanks Mars - I will check it out. OT/ i went to a "townhall" debate/discussion at my sons local high school. some the students were profoundly well informed, one Iranian kid quoted "The Economist" at length and had a very enlightened approach. the students were overwhemingly liberal as were the teachers that spoke - understandable. the one thing that struck me is the lack of optimism - i was in 9th grade in 1969 and the 1960's were about opimism, change and making things better - there was so much energy. today's students do not exhibit the same optimism for change and upon reflection, no longer do i. im going to change that in myself and children, i refuse to let whatever evil, selfish force that is running this country continue. this is the last election that i will be a spectator to - im gonna get involved. If you run for public office, can I be your Deputy in charge of the Walking-Around-Money Secret Slush Fund? Link to comment Share on other sites More sharing options...
Pee Brain Posted October 14, 2004 Report Share Posted October 14, 2004 PB - do you really believe anything you have ever read on Drudge regarding any subject whatsoever? yes, absolutely i believe it. i also believe that the repub's have a plan along the same lines. ive just had it, again, there is no choice at all this year, AGAIN! read that concordia group doc that is floating around, both candidates are lying POS - we need some BIG changes, we have lost our bearings - unless you are a special interest that is feeding the pigs, you're gonna get shafted. Nascar Track owners are included in a corp tax cut bill? i mean its the SOS, just a different day, everyday. if a country set out to destroy itself, not just financially but socially and moraly, what more could it do than we are doing right now? Link to comment Share on other sites More sharing options...
GregFokker Posted October 14, 2004 Report Share Posted October 14, 2004 If you want a good book on Chaos and the markets, one that is a tad beyond the trivial but if you take the time with it can bring rewards it is CHAOS and ORDER in the Capital Markets by Edgar E. Peters. $65.00 also published by Wiley I have the second edition 1996 - don't know if it has been updated. Good news =it's in Doc's Bookstore for 37.50. Do a search on "Chaos and Order" Thanks Mars - I will check it out. OT/ i went to a "townhall" debate/discussion at my sons local high school. some the students were profoundly well informed, one Iranian kid quoted "The Economist" at length and had a very enlightened approach. the students were overwhemingly liberal as were the teachers that spoke - understandable. the one thing that struck me is the lack of optimism - i was in 9th grade in 1969 and the 1960's were about opimism, change and making things better - there was so much energy. today's students do not exhibit the same optimism for change and upon reflection, no longer do i. im going to change that in myself and children, i refuse to let whatever evil, selfish force that is running this country continue. this is the last election that i will be a spectator to - im gonna get involved. Good for you, Peeb. Having myself given up all hope for all but myself and a select few (many of whom are right here), I sincerely wish that you have a good experience fighting the entropy. That lack of reasonable hope has been most debilitating- and it's only been in the last few years for me. Link to comment Share on other sites More sharing options...
Jimi Posted October 14, 2004 Report Share Posted October 14, 2004 if a country set out to destroy itself, not just financially but socially and moraly, what more could it do than we are doing right now? Vote PeeBrain? Link to comment Share on other sites More sharing options...
Pee Brain Posted October 14, 2004 Report Share Posted October 14, 2004 Jimi, sorry dude, but im so anal ive always insisted on paying for my own meals and expenses when serving on a committe or doing volunteer work. you can be in charge of the psychodelics though; does that work? Link to comment Share on other sites More sharing options...
pistolpapa Posted October 14, 2004 Report Share Posted October 14, 2004 "Gee Mr. PPT, no matter how much air I put in the tire, it just comes right back out. Sure you don't want to buy a new tire. We got some on sale this week." "Would I have to empty all the air out of this one?' "Why sure you would." "No new tire; Just keep pumping." "Well.........okay." Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.