stained jeans Posted April 18, 2004 Report Share Posted April 18, 2004 A lot of folks believe there is no way that Greenspicot raises short-term rates in this election year. That, alas, is mere folklore as the Fed has raised rates a total of 6 out of the last 12 election years and Greenie himself raised 'em in 1988 and 2000. Now it is possible that Greenspicot only mustered the backbone to do so at the end of a two-term Presidency. But it may also be that economic conditions forced his hand. The ISM prices paid index is back over 80 which in the past has led to a Fed reversal in policy. Higher short-term rates are bad for stocks and policy reversals can be especially damaging -- the market crashes of October 1987 and March 2000 were preceded one month by such reversals. (I speak of crashes as 2-day events of at least a 9 % drop), Higher rates are also a negative for gold. But my work says we have a long way to go before rates reverse the gold bull. Tbills need to get up around 4 or 5 percent to turn me into a gold bear. The following chart came from here. Link to comment Share on other sites More sharing options...
mjkst27 Posted April 18, 2004 Report Share Posted April 18, 2004 I guess the standard rebuttal these days would be "yeah, but labor is cheap and getting cheaper, so who cares what input costs are?" or something. color me undecided. Link to comment Share on other sites More sharing options...
Guest Posted April 18, 2004 Report Share Posted April 18, 2004 Dude, the way I see it when the demand for short-term paper is high the yield can only go down. Right now at what many consider to be a market top that demand can only increase. So we need to watch the spread between the short-term paper and the long-term, which would be the 10-year note. According to some in the know if the spread gets wider then that is an indicator of inflation and the price of gold will rise under such conditions. On the other thread I posted my chart with the diamond pattern on the 10-year monthly chart that looks to resolve itself soon. I expect a 20% move one way or the other. I am looking for yields to go down myself accross the curve and the spread to stay about constant. Now this business about rates of return is meaningless unless you consider the inflation rate. If the inflation rate is higher than the rate of return then you have real negative rates. So it is the real rate that mattters and not so much the nominal rate. Problem is these days the Fed has been busy hiding the true rate of inflation. This being the case the price of gold will continue to rise as rates go up so long as real rates remain negative. Nuf said? I'll give this a little more thought over a drink or two, or maybe three or four Link to comment Share on other sites More sharing options...
K Wave Rider Posted April 18, 2004 Report Share Posted April 18, 2004 3MO daily sure looks like a possible bottom formation..but no danger of a rate hike just yet..remember the Fed generally follows the 3 Month, they don't lead.. Link to comment Share on other sites More sharing options...
K Wave Rider Posted April 18, 2004 Report Share Posted April 18, 2004 Hourly 3MO looks like it could blast at any moment..so a rate hike in the not too distant future is a distinct possibility.. Link to comment Share on other sites More sharing options...
Hypertiger Posted April 18, 2004 Report Share Posted April 18, 2004 Why would the fed raise rates? The system known as debt backed by debt fractional reserve banking is perpetually dependant on the creation of a greater debt inflationary potential then the underlying debt deflationary potential... Raising rates weakens debt inflationary potential lowering rates strengthens debt inflationary potential... In 2001 and well before 911 the FED began chopping rates and up until this point the chop of 550 basis points has been the quickest greatest slashing of basis points in the history of the FED... Why? To strengthen debt inflationary potential great enough to prevent but more realisticly postpone a hyperdeflationary implosion of the debt based money supply... A debt backed by debt fractional reserve banking system grows more dependant on debt inflation the longer it operates... The beginning of the current system was the late 50's...that is when the dependance started...so roughly 45 to 50 years... The last such dependance on debt inflation dynamic was the 14 years prior to 1929...The great depression was caused by a hyperdeflationary implosion of the debt supply...at the time the US was maybe 30% dependant on the dynamic or debt inflationary component of the total money supply... Now the US is 100% dependant debt inflation... This is by far the greatest debt inflationary self delusional bubble ever constructed in the entire 300+ year history of centralized fractional reserve banking...Some are even saying that it is the greatest in all recorded history... For the past 22 years the FED has cut on average of 83 basis points a year...from 1900 to 100... This is basicly it...there is now no way to lower rates enough to prevent or postpone a hyperdeflationary implosion of the debt money supply once the current debt inflationary potential weakens over time... Raising rates would accelerate the already weakening the debt inflationary potential... Holding rates will do nothing since debt inflationary potential is constantly weakening... Inflation is always weakening and deflation is always gaining strength in relation to inflation when inflation runs out of energy it collapses... Due to the construction of the universe...Or explosions would keep expanding forever...deflation is the critical component which prevents the universe from flying apart... A big reason why the current religion you all believe in the just think positive inflation forever religion is a false religion... The debt inflationary messiah you all believe is going to be your saviour is in fact a false profit... The current system is designed to purpetually fight deflation by constantly producing a great enough debt inflationary potential to overpower the always present and gaining debt deflationary potential... Due to the construction of the universe you have truth and lies positive and negative right and and wrong good and evil infinite and finite indestructible and fragile...space and time...inflation and deflation... The truth is infinite and indestructible...deflation is infinite and indestructible...lies are finite and fragile...Inflation is finite and fragile... The truth is positive and lies are negative...The key paradox of the universe which is a construct of infinite finiteness.... The just think positive inflation forever religion is a lie since inflation is finite and fragile...The truth is that deflation is forever... That is the key logical flaw that is why we are doomed...rejection/denial of the truth in favor of lies or self delusion... As intelligent beings we have a choice...Responsible Altruistic logic...submission to the tyranny of truth...or Absolute self indulgent reason the rejection of the tyranny of truth in favor for the tyranny of lies... The tyranny of truth is infinite and indestructible and the only path to salvation... or positive The tyranny of lies is finite and fragile and only leads to damnation...or negative... The system we all depend upon to produce the fantasy we have mistaken for reality is a construct of Absolute self indulgent reason...the tyranny of lies...finite and fragile and negative... Our fate was sealed 100's of years ago...we were doomed the second we were born into it... Truth is the arch enemy of lies...the arch enemy of the just think positive inflation forever religion which is a lie...and the arch enemy of the system which is a construct of absolute self indulgent reason which is a lie... Exposure of the truth will implode the system based on lies and the inevitable implosion of the system based on lies will expose the truth...again a revelation of the key paradox of the universe that is a construct of infinite finiteness... It all boils down to perception... If you had a choice of the universe you would like to live in would you choose one which evil always wins or always loses? Currently we live in a Universe where evil always loses...It always self destructs... Over the past 6000 years of recored history the planet has been coated by the ruins of previous human beings that fail to realize this... Fortunately or unfortunately we have been born at the right place and the right time to see this totally natural function in the mechanics of the Universe play out... Playing with interest rates and printing presses will not do a thing... But you are all short term speculators so I guess that is all that you are interested in...The perpetual inflation of your accounts forever... Bulls and Bears worship the same religion...just minor differences in the interpretation of the dogma... Link to comment Share on other sites More sharing options...
Guest Posted April 18, 2004 Report Share Posted April 18, 2004 How long have Japan's rates been near zero? Link to comment Share on other sites More sharing options...
stained jeans Posted April 18, 2004 Author Report Share Posted April 18, 2004 Why would the fed raise rates? HT, I have read many of your posts. Based on your premises, your logic is impeccable. But... Check your premises. The world is far more comlex than you suppose. There are many interacting cycles, many opposing ideologies, many competing constituencies. In my estimation, you are very much in touch with what the Fed/Gummint agenda is. Question is, are they competent and powerful enough to pull it off? In the long run, and sometimes in the short run, the answer is an emphatic NO! Link to comment Share on other sites More sharing options...
Hypertiger Posted April 18, 2004 Report Share Posted April 18, 2004 How long have Japan's rates been near zero? 9 years at 1% and lower this month...The US shares a symbiotic relationship with Japan which has allowed Japan to survive...The US is the number 1 debt inflationary engine on the planet...Japan at half the size of the US is number 2...Germany at half the size of Japan is number 3... Basically all those below the US are dependant on the US to support their own debt inflationary engines... It is structured as a debt inflationary ponzi scheme with the US at the top...When the US goes...everyone else will collapse also... Link to comment Share on other sites More sharing options...
Hypertiger Posted April 18, 2004 Report Share Posted April 18, 2004 Why would the fed raise rates? HT, I have read many of your posts. Based on your premises, your logic is impeccable. But... Check your premises. The world is far more comlex than you suppose. There are many interacting cycles, many opposing ideologies, many competing constituencies. In my estimation, you are very much in touch with what the Fed/Gummint agenda is. Question is, are they competent and powerful enough to pull it off? In the long run, and sometimes in the short run, the answer is an emphatic NO! They need an excuse to lower rates or they need to secretly get bond yields lower...Psychology must be maintained... Any raising will accelerate the arrival of maximum potential and I can't think of an excuse which would justify a jump in rates... Real estate is key...It is the primary debt inflationary engine... They might also pull the pin at some point...I figure a US or European city being wiped out will provide a good scapegoat...But any city should do... Who is going to believe Fractional reserve banking with compound interest attached is the primary cause of the implosion at that point... I don't know but there has to be an excuse...there always is to divert attention away from the cause... I'm just trying while there is still time for people to think...once maximum potential is reached the ability to think will cease to exist... Link to comment Share on other sites More sharing options...
Guest Posted April 18, 2004 Report Share Posted April 18, 2004 Is there any chance they might pick DC with Bush in the White House, Congress in session, and Greenspan giving testimony on the hill? Link to comment Share on other sites More sharing options...
Metamucil Posted April 18, 2004 Report Share Posted April 18, 2004 Weekly: MACD going up above zero, RSI ready to go above 50; sto turning up from >20...higher low. Rate above 40wkMA. It looks inevitably UP. Link to comment Share on other sites More sharing options...
Hypertiger Posted April 19, 2004 Report Share Posted April 19, 2004 This is what it looks like % change yoy...and you can see that Interest rates have been in fact dropping for 45 years straight to support the creation of a great enough debt inflationary potential to overpower the ever present and underlying debt deflationary potential to prevent but more realisticly postpone the inevitable catastrophic systemic implosion as long as possible... The fact is that due to the inclusion/pairing of the compound interest equation with debt backed by debt fractional reserve banking the Algorithm created can only produce a catastrophic systemic implosion...the longer the Algorithm is supported by debt inflation the larger the magnitude of the implosion...Or the system gets weaker the more you try to strengthen it... Without compound interest fractional reserve banking can still suffer implosion at some point but the theoretical lifespan (Of a debt backed by debt fractional reserve system) instead of being measured in decades can be measured in centuries...and if well regulated chances of a systemic breakdown are greatly reduced... And to regulate a factional reserve system you must control human reproduction and the creation of new money... Since "P" in the above equation must never be allowed to be equal to or less than "C" the ability to regulate "well" or "logically" is basically impossible...I think the exponential component in the equation is the primary problem...the key... But since basicly no one cares I find it hard to care either...The caring up to this point has been a waste of time, I don't know why I don't just walk away...I guess investing 16 years into the study of this horseshit has ruined me... In any system you want balance...Addition of compound interest assures unbalance...which leads to the inevitable reccuring catastrophic systemic implosion...The implosion which 99.999999% of the population is 100% totally convinced is an impossibility... Bernanke's code word for "maximum potential" is the "well-known zero-lower-bound constraint on nominal interest rates" Bill Gross has called it "High Noon" On my first chart a 25 basis point rise would break the downward trend of the past 45 years and cause massive psychological damage...and there is no ability at this point to drop rates like in the past to prevent a collapse in debt inflation that leads to a catastrophic systemic collapse or hyperdeflationary implosion of the debt supply... I figure Mortgage rates and real estate is the only area that there is still an ability to play with to create enough debt inflationary potential to buy more time... But this will only buy so much time...I figure we crash through the longterm red trend line...At some point we will go down and the ability for rates to drop fast enough to catch up to where we are going will become impossible... A rate rise would cause massive damage to debt inflationary potential and the already shrinking division of labor would accelerate... I don't care what the FED or anyone else does...It is basicly over for me...I'll let the speculators speculate... Link to comment Share on other sites More sharing options...
ApresMoi Posted April 19, 2004 Report Share Posted April 19, 2004 HT -- Would you happen to have access to a logarithmic scaled house prices chart? Link to comment Share on other sites More sharing options...
Hypertiger Posted April 20, 2004 Report Share Posted April 20, 2004 No, and I don't know how staring at a log chart is going to change reality... Link to comment Share on other sites More sharing options...
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