Question about dumping $ into the bailout

[Keith P]

Won't it weaken the dollar even more? Hasn't the treasury been churning out $ to fund the war for five years already? The currency exchange rate is pathetic. If American money is worth nothing don't we stand to lose our posturing in the world market? It almost seems the banks need to go through their death throws.

I'm not a market analyst or economist, that's why I'm asking.

[BradH]

Ron Paul: Corporatism - not free markets

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[Left/Right]

Originally Posted by Keith P

Won't it weaken the dollar even more? Hasn't the treasury been churning out $ to fund the war for five years already? The currency exchange rate is pathetic. If American money is worth nothing don't we stand to lose our posturing in the world market? It almost seems the banks need to go through their death throws.

I'm an a market analyst or economist, that's why I'm asking.

yeah this was something i was thinking about...wondering why it hasn't been mentioned in the media.

[PETA]

inflation is a concern but what's worse is stagflation... with a credit crunch and inflation is things really get interesting.... not in a good way

anyway - the FED can largely control inflation so while its a concern I think the scarcity of credit is worse

[Keith P]

Originally Posted by St. Stalin the Apathetic

the FED can largely control inflation so while its a concern I think the scarcity of credit is worse

Dumping $ into the market in installments would sufficiently curb inflation then or some type of oversight committee keeps it from happening? Curious as to how this works.

[Left/Right]

Originally Posted by BradH

Ron Paul: Corporatism - not free markets

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i'm pretty sure that's 3 posts now. haha.

[BradH]

Originally Posted by Left

i'm pretty sure that's 3 posts now. haha.

because there are 3 threads
lol

[PETA]

Originally Posted by Keith P

Dumping $ into the market in installments would sufficiently curb inflation then or some type of oversight committee keeps it from happening? Curious as to how this works.

the prime lending rate has a direct effect in inflation - its not perfect by any means but it is useful

raising or lowering the prime rate at which the FED loans cash effects the rates offered consumers or the cost of credit

David can probably give you a much better answer than that though

[david austin]

not necessarily

in a global downturn there is a flight to safety to currency seen as stable

the us taking steps to curb the problem has in some circles be seen as the leader to stop systemic risk from spreading causing a conituned severe global downturn

then you also have the proponents citing the ROI which would greatly benefit the dollar on the global market.

[PETA]

Originally Posted by david austin

then you also have the proponents citing the ROI which would greatly benefit the dollar on the global market.

not to mention impacting positively on the cost of the plan

[Left/Right]

Originally Posted by St. Stalin the Apathetic

inflation is a concern but what's worse is stagflation... with a credit crunch and inflation is things really get interesting.... not in a good way

anyway - the FED can largely control inflation so while its a concern I think the scarcity of credit is worse

i'm not going to claim i know it all but from what i understand...
the way they control inflation is by how much they allow in the market and with interest. but if this does go through, and we do have inflation, they might raise interest again to battle it...causing more default loans. lol.

[Keith P]

Originally Posted by david austin

not necessarily

in a global downturn there is a flight to safety to currency seen as stable

the us taking steps to curb the problem has in some circles be seen as the leader to stop systemic risk from spreading causing a conituned severe global downturn

But the asian markets haven't been hit as hard as us have they? I heard they've been moving in to buy out some american companies.

[david austin]

Originally Posted by Left

i'm not going to claim i know it all but from what i understand...
the way they control inflation is by how much they allow in the market and with interest. but if this does go through, and we do have inflation, they might raise interest again to battle it...causing more default loans. lol.

no because those loans are not being offered anymore (unless you have next to perfect credit)

loans like arms are the affected ones.

your standard auto/15yr/30yr notes are locks.

interest isnt a bad thing... its a see-saw to gauge growth vs inflation

[PETA]

Originally Posted by Left

they might raise interest again to battle it...causing more default loans. lol.

raising the prime rate won't effect already written notes unless they are pegged to the prime...

some cc's are pegged to prime and some arms are as well

however the biggest impact of raising the prime rate won't be defaults but fewer people with the ability to pay for credit.... fewer people will be able to afford homes or they'll buy less expensive homes.... which can also have the effect of dropping the value of RE

[david austin]

Originally Posted by Keith P

But the asian markets haven't been hit as hard as us have they? I heard they've been moving in to buy out some american companies.

the shanghai index is off around 60% from its highs in 2007

they have more funds available... but they are experiencing just as much (if not more0 than we are