United States Heading towards a Depression?

Food and Oil prices rises are not increasing due to inflation.

Oil is rising in price due to a supply demand issue. Demand is increasing exponentially while supply is decreasing exponentially.

Food is rising because of the oil price increase, but also because it has its own supply demand issues. For example meat consumption has doubled per person in China over the last 10 years. It takes something like 7 kilos of grain per kilo of beef, 5 kilos of grain per kilo of chicken, and 2 kilos of grain per kilo of pork.

Grains are also increasingly being used for subsidized biofuels.

Therefore the fed should not increase interest rates to try and prevent food, and energy increases - the supply and demand scenarios of the food and energy markets are removed from its influence and control.

The fed basically should raise interest rates to prevent further poor lending.

Really it makes no difference what the fed does anyway because banks are not lending - even if the credit rate goes to zero. A credit contraction is already in effect.

What we really have is deflation in both credit and real assets.

 

Oil is 71 Euros per barrel so it isn't so bad.

However, the Fed has been printing money and bailing out banks. The dollar devaluation has caused Oil to spike to $115 a barrel.

 

Hon Daddy, if I were gay I would kiss you right now!

Could not agree more... Interest rates belong at double digits right now!

 

Kiss him anyways.

Well, the market would naturally have a high rate because credit is contracting, and capital is hard to come by. Of course, the FED works counter-intuitively, propping up Wall Street and private banks, while devaluing savings.

 

Wasn't Ron Paul saying something about "artificially low interest rates" a few months ago?

I've seen student loans shoot up to double digits, and a lot of lenders are just getting out of the business altogether because you can't really charge what the loan is worth in this currency depreciation.

 

The problem is the lower rates are not typically passed to the consumer. What is being lowered is the rate at which the banks can lend or be lent to. The trouble is this hits those of us that actually save money really hard. It gives me no more incentive to save money, at least not in a bank.

I've seen a 50% reduction in interest earnings almost over night. Interest rates should go up to not only reduce the number of stupid lenders giving out loans to people that should not have them, but they should be raised to help the market correct itself by forcing those hanging on by a thread to give up and move on.

Nothing like discouraging savings than to reduce the rate at which you are paid for keeping a bank liquid.

 

No comment.

 

it would be nice to get interest from bank accounts again

 

No shit.. I'm at 2.86 on a money market that was earning around 6% a few weeks back... It's sick.

I see the fed is finally gonna start bitch slapping CC companys today. That will be a welcome change. Those guys can and do do, pretty much whatever they want.

 

The price of Oil in Euro's has pretty much tripled in the last 6 years. Oil has risen drastically in all currencies.

 

Yeah Google is the new Jesus.

 

Merrill Lynch posted its third straight quarterly loss and plans to cut 2,900 more jobs after recording $6.5 billion in write-downs on subprime mortgages and other risky assets

http://news.yahoo.com/s/nm/20080417/bs_nm/merrilllynch_dc;_ylt=AjLILFp.fSRoltgt1F5Na8Ks0NUE

 

Let's face the U.S. is in hock up to its eyeballs - the time has come to the bagman

 

Google Trends on the fence - http://google.com/trends?q=recession&ctab=0&geo=all&date=all&sort=0

 

In Google we Trust.

 

Nah, people just started searching for new terms:

http://google.com/trends?q=recession,+crisis&ctab=0&geo=all&date=all&sort=0

When "Recession" searches hit its peak in 2007, "Crisis" took off like a rocket and talk about a recession died back down.

 

Google isn't a good metric to measure the economy. Banks continue to post losses and housing prices are still on the way down. I wondering which bank will be the next to fail?

Citigroup said Friday it lost $5.1 billion during the first quarter as poor bets on mortgages and leveraged loans lopped billions of dollars from its investment portfolio.

http://news.yahoo.com/s/ap/20080418/ap_on_bi_ge/earns_citigroup;_ylt=Ah63Vgg7KGIDWPQ.bzy2ZXus0NUE

 

Like I want another over-valued stock defining market value...