Comments on: How Not to Reduce Excess Reserves

By: Pat G.

Pat G. — Sun, 23 Aug 2009 20:05:45 +0000

“Many observers contend that the large increase in excess reserves poses a significant inflation risk.”

Yep… And they won’t take up rates until post-elections, next year. If then. “Got no where to run baby, no where to hide”.

By: constantnormal

constantnormal — Sun, 23 Aug 2009 14:52:32 +0000

but but but … if they cannot drain excess reserves without crashing the economy, how will the Fed combat the inflation that is certain to occur once the dollar has declined sufficiently to crank up prices via our import economy?

I mean, I know that we have cut the amount of imports a lot, but the fact remains that we have offshored a huge amount of the manufacturing that we used to to in this country, and we still continue to import a huge amount of raw materials (oil, nuclear fuel, …). There just ain’t no way, no how that we are going to become self-sufficient to the degree necessary to prevent imports cranking up prices once the dollar slides enuff.

If the dollar continues to slide — and it seems that the only thing which will halt the slide in the dollar is a rise in rates (draining reserves) — inflation seems to be GUAR-AN-TEED at some point down the road.

Maybe stocks CAN grow to the moon on inflated whisps of earnings. Maybe.

By: Seattle Chill

Seattle Chill — Sat, 22 Aug 2009 20:59:59 +0000

Did the banks practice “extend and pretend” in the 1930s? Was there “mark-to-model?” I’ll believe the banks really have “excess reserves” when they start voluntarily expanding credit again.

By: torrie-amos

torrie-amos — Sat, 22 Aug 2009 19:47:51 +0000

so, if u project out, the dollar is going too 62 and we rally in equities, hmmmm, something to consider

By: contrabandista13

contrabandista13 — Sat, 22 Aug 2009 18:34:27 +0000

Here’s a little view you can gander at… Kinda confirms historical perspectives that, “once a pattern is established, it will change.”

S&P vs. dollar index

Daily:

http://futuresource.quote.com/charts/charts.jsp?s=SP&o=DX&a=D&z=800×550&d=medium&b=bar&st=

Weekly:

http://futuresource.quote.com/charts/charts.jsp?s=SP&o=DX&a=W&z=800×550&d=medium&b=bar&st=

Monthly:

http://futuresource.quote.com/charts/charts.jsp?s=SP&o=DX&a=M&z=800×550&d=medium&b=bar&st=

I question the rationality of the markets. However the question is, how long can the markets remain irrational? As Gunga Din would say, “In a very soon moment…..”

Best regards,

Econolicious

By: alfred e

alfred e — Sat, 22 Aug 2009 17:49:16 +0000

Fits the Thinktank P/E posting. Free c*s*n* money. WordPress filters suck.

144. A new record.

The chart looks strikingly similar to the oil price chart last year.

Who says the bankster/speculators and money changers can’t manipulate prices at the expense of the sheeple?

And of course commodity prices are tracking. And the sheeple get sheered.

S o I suppose all we can do is go out and spend so things don’t get any worse than they already are.

Baaaaaaa.