Question for monetary gurus...

[cska80]

What tools do the Federal Reserve still have left as things go down hill? Is Congress giving them more power to take over to buy out loans and such the last tool they could use? I know they can't possibly lower rates any more than they are.

[AJ Antimony]

Oh, the rates can go lower.

[RideTheDirt]

Oh, the rates can go lower.
+1

[brandon]

I know they can't possibly lower rates any more than they are.

The interest rate is 2% currently. They can lower it all the way down to 0%, and they probably will.

[cska80]

Do you really think they'd do that? Wouldn't that be too incredibly devestating to the dollar? How could they possibly spin doing that?

[brandon]

Do you really think they'd do that? Wouldn't that be too incredibly devestating to the dollar? How could they possibly spin doing that?
They have lowered it by 2.5% in the past 6 months. You really think they wont drop the final 2%? They have done it before. The only difference is this time we are deep in debt.

[cska80]

And also we're in a severe oil crisis due to many things including the dollar crisis. I keep seeing decent gains, then sharp losses on the market. I keep seeing foreclosures getting worse in the same areas as before, but spreading to other areas now. I see airlines getting screwed. It seems like everything isn't quite snowballing, but a constant steady drip since the last rate cut. I definately see them needing to do something once another big shoe drops.

[jd603]

Lowering or raising the rate will do damage in different ways. Fed pretty much has their backs against the wall. I'm one of the people who doesn't believe whats happening is an accident or a natural business cycle.

Also, OIL prices are high here mostly because of the US Dollar , which is what the MSM never mentions, it is NOT a supply and demand/peak oil issue despite what all the talking heads on the TV say.

for more on oil see: http://video.google.com/videoplay?docid=3340274697167011147

I think he is not explaining the worldbank stuff properly and inflation etc but he's very much right about there be NO shortage of oil, at all.

[cska80]

I know that supply and demand play a part in what's going on, but the relationship between the cuts and sharp spikes in oil prices are too close to ignore. I also think it's deliberate, but I'm trying to understand what kind of spin they could put on a rate cut. I generally wanted to know what else other than rate cuts can they do without congressional power shifts?

[jd603]

Even OPEC says there's no supply shortage. It plays a factor, OPEC is a way to price manipulate oil, for sure, it's not "good" but OPEC is hardly responsible for the current spike in gas/oil. So the whole attacks on them are absurd.

The "core" problem that existed before the current price issues is that the big 4 oil cos (or rather the extremely rich families who founded these companies) got together to limit supply that is being introduced, maximizing profits. They aren't going to invest billions in infrastructure and pump out tons more oil or refine tons more gasoline if all it will get them is less profit and an oversupply of product they cannot move.

So there is a long standing supply and demand issue, but it is a manufactured one.

The falling US Dollar vs. other currencies is what is causing the majority of the price increases at the pump recently.

Edit: Also watch the video I posted, the need to have the middle eastern oil producers keep buying our debt sounds like a big piece of the puzzle. It's a cluster $#%$ from what I can tell. I actually think it traces back to the central bankers including the fed, a monopoly on oil is a very powerful tool to wield as is a monopoly on printing money.





I know that supply and demand play a part in what's going on, but the relationship between the cuts and sharp spikes in oil prices are too close to ignore. I also think it's deliberate, but I'm trying to understand what kind of spin they could put on a rate cut. I generally wanted to know what else other than rate cuts can they do without congressional power shifts?

[cska80]

You know, it's funny to hear Howard Stern complain about the government taking years to decide on the Sirius/XM merger. He talks about how oil companies merge over night, but XM and Sirius takes years for them to do anything.

[jd603]

http://www.youtube.com/watch?v=NIwlKyz6LvU

http://www.youtube.com/watch?v=kESX-v7MLzI

also, theres a good spech paul gave in congress i'm trying to find addressing some of this..

[AFM]

Chances are they WILL NOT lower the IR

But they are just making up new rules all the time now.
Now they are accepting student loans as collateral?

[kombayn]

How about someone just blows up the Federal Reserve? Wait... Wait... I'm kidding... Or am I? Actually yes I am, I don't want to be considered a homegrown terrorist! (How do they seriously pass bills like that?)