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That dude that came on CNBC just before the FOMC announcement and said that
the Fed was wrong to raise rates sounded a lot like that (republican)
politician a few hours earlier they showed pontificating about how the Fed
was wrong to meddle with rates, inflation wasn't a threat, was never a
threat and they should just leave well enough alone. The guest (Michael
Kudrow, I think or something like that) went on to cite an example saying
that even as far back as 2500 years ago, when gold was low and a country's
currency was strong was there ever the threat of inflation. While it could
be hard to debate that precedence, it's also possible that he's missing a
point. That point being the reason why we are where we are currently is
because the Fed has remained hawkish on rates which has all but kept gold
low (remember the spike in gold a couple months ago) and our currency
strong. If the Fed had listened to people like this way back when they
started all of this, then gold could very well be higher and the currency
stagnate or lower. It amazes me how there are always people, despite
overwhelming evidence in favor of the current model which has worked in the
past and should continue to work, will still denounce it. This is more ego
talking then rational thought IMO.
And of course he had his agenda too. He went on to give a plug for
everybody's favorite tradergirl-esque presidential candidate, saying that
social security as defined by bush (fuzzy as it may be) would further
bolster the stock market with an influx of cash and that the stock market
was acting positively to that. Of course, this is about as close to price
fixing as it gets and the assumption here is that this could protect the US
from a prolonged bear market. My problem with this logic is that how can a
1 time influx of cash continue to bolster the stock market overtime? Once
it's in it's in and then who is left to buy at such ridiculous prices? Once
prices hit an equilibrium with the amount of money coming in from SS tax,
then the market is left to operate normally against the current economic
backdrop. Of course, the brokers and middle men make out like bandits and
they're all heavy contributors to election campaigns. Details right now are
fuzzy on this and probably will remain that way for good reason through the
elections but I could see them restricting the types of companies you could
invest in by requiring you to go through a few select firms that carry a
limited inventory of select stocks. Internet stocks need not apply which
smacks of corruption and manipulation. If they don't do this then people
will have the ability to invest their SS in comapnies like Red Hat, or
Drugstore.com, or even god forbid, Omega. And I guess there will always be
those wierdos that loose it all and go on shooting sprees. Of course people
will buy at tops but if history repeats itself then market cycles should
make them some money at least every 20 years or so.
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