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# The Fed cuts rates to 1.00% - the war on savers continues

Wednesday, October 29, 2008, 1:42 PM

WASHINGTON (MarketWatch) - The Federal Reserve on Wednesday slashed overnight interest rates by a half-point to 1.0%, and signaled that downside risks to growth remain, indicating even more rate cuts could come.

In its statement, the Federal Open Market Committee said the pace of growth has slowed "markedly" and the extraordinary financial market stress could put the economy at greater risk.
The Fed said that inflation was no longer a threat and that the central bank will cut rates as needed to boost the economy.

No real surprise here, but I will make a comment or two. The Fed, representing status quo interests, is desperately trying to recreate the exponential expansion of credit and debt that marked the last 2 decades (but really picked up steam from 2000 onwards).

Of course, one way to do this is to punish savers - you know, people who might choose to put money aside rather than spend it immediately on stuff.

This is the first thing that setting such a low rate does.  It assures that anybody with money in a CD will pretty much be guaranteed to lose money.  Better to spend it.

Second, the ultra-low rate rewards big banks who make their living by borrowing at a low rate (from the Fed and savers) and lending at a higher rate. So the rate cut is just a way to throw a bit more loot into the banking system at the expense of workers.

Remember, it was Alan Greenspan's 1% "blowout special" in 2003-2004 that led to this entire mess.  Left completely unsaid in the article above (and all others) is how trying the same tactic again is going to deliver a different or better result.

Instead, we might just have to admit to ourselves that we are not going to be returning to the credit free-for-all that dominated the past few years.  Which means that more than a few organization and financial institutions that built their operations around the perpetual expansion of credit may have to fold up shop or skinny down their operations.  This includes government at all levels.

I think this rate cut is a mistake and that it signals weakness rather than strength.  The Fed is rapidly shedding its patina of credibility.

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Prosper! is a "how to" guide for living well no matter what the future brings.

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## Join the discussion

ajparrillo
Status: Bronze Member (Offline)
Joined: Sep 7 2008
Posts: 72
Plunge Protection Team

An article on the recent irrational market behavior caused by the Plunge Protection Team.

http://www.webofdebt.com/articles/manipulation.php

Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: The Fed cuts rates to 1.00% - the war on savers continues

I posted this under a different thread as well but this is an important read, especially the end of the article (I just posted the first few paragrpahs

http://www.financialsense.com/fsu/editorials/kirby/2008/1029.html

Just gets better and better. I haven't read the entire article I stopped here.

# Plumbing the Depths of Depravity

### by Rob Kirby | October 29, 2008

Print

First, for a bit of historical context, a little bit of fact-finding pertaining to Henry Paulson, complements of my friend, Jesse:
“I didn't know he was a member of the Nixon White House as his first 'real job.'

In 1970, fresh from the Masters program of the Harvard Business School, Paulson entered the Nixon administration, working first as staff assistant to the assistant secretary of defense.

In 1972-73, Paulson worked as office assistant to John Erlichman,assistant to the president for domestic affairs. Erlichman was one of the key figures involved in organizing President Richard Nixon’s notorious "plumbers" unit that carried out illegal covert operations against the president’s political opponents, including espionage, blackmail, and revenge. Erlichman resigned in 1973, and in 1975 he was convicted of obstruction of justice, perjury, and conspiracy, and was imprisoned for 18 months.

Utilizing his connections, Paulson went to work for Goldman Sachs in 1974. In a 2007 feature, the British newspaper the Guardian wrote, "Not only was he well connected enough to get the job [in the Nixon White House], but well connected enough to resign in the thick of the Watergate scandal without ever getting caught up in the fallout. He went straight to Goldman back home in Illinois."

Birds of a Feather Fly Together: The Plumbers Live On in Infamy

Carl Veritas
Status: Gold Member (Offline)
Joined: Oct 23 2008
Posts: 294
Re: The Fed cuts rates to 1.00% - the war on savers continues

SCENES FROM THE ER, ACT 2008:

NURSE: But Dr Ben, you are prescribing the same medicine that made the patient vilolently ill!

DR BEN: Nurse, I've made up my mind so don't confuse me with facts. Besides, his time I'm tweaking the dosage.

Nurse, inject the patient with 1/2 point of the elixir, pronto! And leave the bottle near the table.

Seanj360
Status: Member (Offline)
Joined: Sep 9 2008
Posts: 7
Re: The Fed cuts rates to 1.00% - the war on savers continues
[quote=Cluesaw]

SCENES FROM THE ER, ACT 2008:

NURSE: But Dr Ben, you are prescribing the same medicine that made the patient vilolently ill!

DR BEN: Nurse, I've made up my mind so don't confuse me with facts. Besides, his time I'm tweaking the dosage.

Nurse, inject the patient with 1/2 point of the elixir, pronto! And leave the bottle near the table.

[/quote]

Good read on the Bailout's "Dirty Little Secret"

Cheers!

srbarbour
Status: Silver Member (Offline)
Joined: Aug 23 2008
Posts: 148
Fed cuts rates! Ha! Like they have any control right now.

Note that the real rate has been floating around 0.67% for some time now.   This is because the Fed is not, and has not (since October) in control at this time.    Thus, setting the rate to 1% is a joke.    If anything, if this leads the Fed to regain control of the rates, it'll actually increase the rate, not decrease it.

--

Steve

Japers
Status: Member (Offline)
Joined: Apr 17 2008
Posts: 14
Re: The Fed cuts rates to 1.00% - the war on savers continues
Gentlemen, this is the tip of the iceberg. What most people cannot see is that the ensuing race to lower interest rates is going to be short term. With tax revenue tumbling and borrowing increasing at record rates, our Government will soon be completely insolvent. At this point it will be difficult in the extreme to pay the interest as "investors" will start to shun bond issues. In a panic to raise money bond prices will drop through the floor and yields will go through the roof. Interest rates will rise to 10,15,20 percent perhaps . If you think it can't happen here, take off your blinkers. So at this point what happens to the housing market? You guessed it - implosion. We will see perhaps a 90 percent drop from its highs before this is over. We are heading into the largest deflationary depression in history and the meddling fools in government and regulation cannot stop it, only prolong it.
Thankfully it will be better for our kids, maybe grand kids. Hopefully war will not hit us too hard. Good luck and look after your family first.
DavidC
Status: Silver Member (Offline)
Joined: Sep 29 2008
Posts: 243
Re: Plunge Protection Team

ajparrillo,

If true, it explains a lot! It certainly backs up my own feelings on the odd movements in Gold and day trading it (odd movements around 2 p.m. Lomdon time) - it does look, though, that the current movements are heading where it should be, i.e. upwards!

srbarbour
Status: Silver Member (Offline)
Joined: Aug 23 2008
Posts: 148
Re: The Fed cuts rates to 1.00% - the war on savers continues

[quote]What most people cannot see is that the ensuing race to lower interest rates is going to be short term.[/quote]

The Fed targer fund rate and bond interest rates are completely different things.    In any case, the T-bond's decent into lower and lower yeilds is a 30 year run --

I do, however, agree it will come up.   The US has put out too much debt and too high a deficit for anything else to happen.

[quote]With tax revenue tumbling and borrowing increasing at record rates, our Government will soon be completely insolvent.[/quote]

Our government has most likely been insolvent for a decade now.   The word you are looking for is bankrupt.

[quote]s. So at this point what happens to the housing market? You guessed it - implosion.[/quote]

The housing market can implode just fine on its own, thankyou very much.

[quote]We are heading into the largest deflationary depression in history and the meddling fools in government and regulation cannot stop it, only prolong it. [/quote]

If/when bond prices crash, we won't be having a deflationary depression.   Recall what our currency is backed by -- T-bonds.  Once those crash, we'll see enormous inflation.      If this notion confuses you, I have a forum post you can read.

[quote]Hopefully war will not hit us too hard.[/quote]

One of the lovely advantages of having an ocean to both the East and the West, and friendly non-militant nations to the North and South -- plus the most absurdly powerful military, navy, and airforce in the world -- is that the only kind of agressive war the USA needs to fear is the civil and nuclear kind.

--

Steve

Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
The better question is what does this rate cut do to currencies

my calls have been pretty spot on in the currencies and my take on this rate drop is that it will temporarily move relative values but it doesn't do much to change the situation that the US is still in better shape to handle financial stress than other countries.  The movement of cash out of T-bills and the US due to a rate cut is dumb... it's not like people were getting much anyways.  The reason behind the strength in the USD was a flight to safety, not yield.  That may be a different story in a place like Iceland where 18% bank rates gives you a reason to take on risk and while some may be tempted by such rates thinking of the 1970's where in Canada we had similar rates, Iceland has a much less diversified economy.  I think any recovery in the Euro, the AUD, or any of the baltic states for that matter, should be sold... they are in much more trouble in the short to medium term.  A change in commodity prices might change all that but for now, I can only attempt to make calls a few months out... how people make or get paid to make calls for longer than a year, I have no idea how they do it.

Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
Forgot to mention-just wait until the ECB and others drop rates
then I think you'll see yet another move in currencies that could put further strain on the financial system.
srbarbour
Status: Silver Member (Offline)
Joined: Aug 23 2008
Posts: 148
Re: The better question is what does this rate cut do to currenc

[quote]my calls have been pretty spot on in the currencies and my take on this rate drop is that it will temporarily move relative values but it doesn't do much to change the situation that the US is still in better shape to handle financial stress than other countries. [/quote]

This rate drop probably won't do anything at all.   The overnight lending rate has been, and remains, well under 1%.   This has been almost continuous since October began.  In essence, the Fed has lost control of this rate.

[quote] The movement of cash out of T-bills and the US due to a rate cut is dumb... it's not like people were getting much anyways.  [/quote]

[quote]For example, assume a particular U.S. depository institution, in the normal course of business, issues a loan. This dispenses money and reduces the bank's reserves. If its reserve level falls below the legally required minimum, it must add to its reserves to remain compliant with Federal Reserve regulations. The bank can borrow the requisite funds from another bank that has a surplus in its account with the Fed. The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.[/quote]

The Fed target rate is an attempt to manipulate the effective rate.   Nothing more, nothing less.  T-bonds don't enter into the equation.

[quote]The reason behind the strength in the USD was a flight to safety, not yield.[/quote]

Not really.  The rapid strengthening of the USD was driven primarily by a demand spike created by deleveraging.   This is, in many ways, very similar to the how the unwinding of Yen carry trade resulted in the massive strengthening of the Yen.  The difference being the intent.

The dollars are needed to pay down dollar denominated debt (e.g. so that an institution may delever itself). So why only the dollar?  Because dollar denominated debt is such a huge proportion of all debt.   Thanks to the dollar being the reserve currency for so long.

--

Steve

jdb123 (not verified)
Re: The Fed cuts rates to 1.00% - the war on savers continues

My hats off to the posters above on this thread---one of the better on here in a while in my opinion...

My only comment on the rate cut would be that---even though we can all agree that their strategy is totally wrong---even from their own perspective--they are running out of bullets meaning their ability to delay the inevitable is one straw shorter.....

srbarbour
Status: Silver Member (Offline)
Joined: Aug 23 2008
Posts: 148
Re: Running out of bullets?

[quote]they are running out of bullets meaning their ability to delay the inevitable is one straw shorter..... [/quote]

Running out of bullets?  You are so kind.   At this point I'd long since imagined Ben shouting *Bang! Bang* on the top of his lungs while he pulls the trigger. All the while internally praying that nobody will notice he ran out of bullets a long time ago.

Guess he isn't doing too badly.  There's still plenty of people diving for cover at each shout!

--

Steve

jdb123 (not verified)
Re: Running out of bullets?

Steve--YES---you are right!!!!

But let me say also with due respect---you are wrong---lets not forget---they ACTUALLY believe what they are doing is the right action(s)....they actually believe that IF they can manipulate the "growth" or perception of such, that they weather the storm.....they have sooo many buttons to push and markets to manipulate--and counties ( eastern Europe ) to WORRY about--they are ;ike a grnadma finding out she needs to feed 27 people from the club whos over for dinner when she thought her son was bringing two friends.........BUT---its ALL under control mind you..........

and Chris...no financial refrerrals..?  Is someone who you "begged" to listen to "THE CRASH COURSE" better than me to give sound financial guidance.........????????? JMHO---give A list--OR GIVE SOMEONE who is ON BOARD..........Isn't that what this site is about...???

...my apologies "begged"----is not the right or respectful word---but perhaps solicitated------explained-----convinced...proactively sought after...etc.  etc.......

Jerry---Personal Financial Rep.----The RIGHT way..............Lets get that 401K etc. in the RIGHT products!!!

Perhaps my straight forwardsness is not always taken as "pleasable" as some would like---more a life comment than this site in peticular-there----BUT---THAT ___ IS --what you'll get ---complete coordination with what Chris"s message is...." preparing for being right ----is a MUCH less problem than preparing and being wrong ( AND 80+% your right anyway )

Lets prepare--not from someone who was "solicitated" BUT from SOMEONE ON BOARD HERE!!!

Jerry---PFR--Aligned--100% With Dr. Martensons' message and outlook!!!!!!!!!!!!!!!

jdb123 (not verified)
Re: Running out of bullets?
I forgot to mention--"LIQUIOD--LQUIOD--LIQUIOD'  is the KEY---not 30 days ---BuT 30 minutes................
nodebthere
Status: Member (Offline)
Joined: Aug 17 2008
Posts: 22
Re: The Fed cuts rates to 1.00% - the war on savers continues

Sorry:

Are you all on crack??  You can cut rates to 0%  , too bad we have already hit the iceberg and we don't have enough life boats. Hope you have saved at least five years of income or you are Dicapprio going down!!!!!

nodebthere, bob

Status: Diamond Member (Offline)
Joined: Mar 18 2008
Posts: 1077
We're Going to Fund the World

It's even cooler that the Fed is now lending $120 billion to Brazil, Mexico, South Korea, whomever. We may not be able to "change the world," as Obama said, but we're sure going to FUND the world. What the hell -- with paper money, liquidity is unlimited. It would be selfish not to share the wealth. ONE PERCENT FOREVER! PIMP MY HOUSE, BEN BABY! srbarbour Status: Silver Member (Offline) Joined: Aug 23 2008 Posts: 148 Re: We're Going to Fund the World [quote]t's even cooler that the Fed is now lending$120 billion to Brazil, Mexico, South Korea, whomever. We may not be able to "change the world," as Obama said, but we're sure going to FUND the world. [/quote]

?

Fund the World?

We are just letting them temporarily cash in some of their currency for some of ours. This is nothing more than an attempt to address the huge dollar shortages that have been ravaging their economies. This actually has very little risk involved short of a complete blow up on the part of their currency.

Even then, a $1-10 billion dollar loss is a damn cheap way to earn points and maintain alliances. Especially when compared with our '$1 trillion Iraq invasion' plan.

--

Steve

rlee
Status: Silver Member (Offline)
Joined: Sep 18 2008
Posts: 148
Re: The Fed cuts rates to 1.00% - the war on savers continues

The current and recent past government credo is 'Spend, Spend, Spend' to make our economy function and grow.  A very lame attempt at cash infusion was that ridiculous "IRS Stimulus" payment that cost us more in printing costs telling everybody about the thing than they gave back!  Now they need to find something bigger in an effort to put spending back in the forefront.  Make borrowed money "Practically Free!" and people will spend it, right?  Heck, they did the same thing with the mortgage market a while back and that worked out terrific for the economy!!

All I have to say is:  "What the hell is the world coming to"?!

Main Entry: in·san·i·ty

Pronunciation: \in-ˈsa-nə-tē\

Function: noun, verb (4)

Inflected Form(s): plural in·san·i·ties

Date: 1590

1: a deranged state of the mind usually occurring as a specific disorder (as schizophrenia)

2: such unsoundness of mind or lack of understanding as prevents one from having the mental capacity required by law to enter into a particular relationship, status, or transaction or as removes one from criminal or civil responsibility

3 a: extreme folly or unreasonableness b: something utterly foolish or unreasonable

4:  repeating the same task in anticipation of a different result each time

Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: The Fed cuts rates to 1.00% - the war on savers continues

No manipulation here. None, nodda, zip.

Stocks open sharply higher after GDP report

Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
So why is it bad to take on debt if the gov't is handing it out?
I'm just thinking of some of Chris' warnings and specifically to stay debt free.  If I mortgaged my house, why would that be a bad thing?  The gov't and banks are throwing out credit like no tomorrow, rates are cheap... why wouldn't I take advantage of this?  I can just let my cash sit in the bank for a bit but what I do know is that the opty cost of not having that liquidity and missing opportunities is pretty big.  Can anyone tell me what going INTO debt at this time is a bad thing?  I can afford the interest payments, 5 year mortgage rates are super low.
ajparrillo
Status: Bronze Member (Offline)
Joined: Sep 7 2008
Posts: 72
Re: So why is it bad to take on debt if the gov't ...

The issue is having a tangible asset vs. liquidity.  Wouldn't the problem be that with the probable economic decline and rising inflation, that liquidity would be devalued while not owning the house outright (assuming you already do)?  So in the future economy of hyper inflation, it is not a good trade off going into debt at current assessed value of property since it will be increasingly difficult to pay down the principle no matter the interest rate.  Am I seeing this too simplistically?

Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
the problem is that I think consensus with Chris is that we are
going to go through a period of deflation before inflation and by that time, I will re-invest my money that I get from the house into hard commodities like gold or oil futures
joe2baba
Joined: Jun 17 2008
Posts: 807
Re: The Fed cuts rates to 1.00% - the war on savers continues

it only appears insane to those outside the asylum.

## a⋅sy⋅lum

–noun
 1 (esp. formerly) an institution for the maintenance and care of the mentally ill, orphans, or other persons requiring specialized assistance.
 2 an inviolable refuge, as formerly for criminals and debtors; sanctuary: He sought asylum in the church.
3. International Law.
 a. a refuge granted an alien by a sovereign state on its own territory.
 b. a temporary refuge granted political offenders, esp. in a foreign embassy.
 4 any secure retreat.

Origin:
1400–50; late ME; < L < Gk ásȳlon sanctuary, equiv. to a- a- 6 + sŷlon right of seizure

does this term sound remotely familiar.

"inviolable refuge for criminals and DEBTORS: he sought aslum in the govt." jp morgan, goldman sachs , gm chrysler, singapore, wells fargo, iceland, etc etc etc etc

i particularly like #3 &4 and of course the origin................"right of seizure" which dates to the time of the first bankers.............the gold smiths. and obama wants a change hahahahahahahahahaha

i still dont know what comes after surreal.

srbarbour
Status: Silver Member (Offline)
Joined: Aug 23 2008
Posts: 148
Re: So why is it bad to take on debt?

[quote]I'm just thinking of some of Chris' warnings and specifically to stay debt free.  If I mortgaged my house, why would that be a bad thing?  The gov't and banks are throwing out credit like no tomorrow, rates are cheap... why wouldn't I take advantage of this?[/quote]

Because during an economic disaster you cannot guarantee that your income will remain the same, or remain at all.

Further, even if your bank has been bailed out / is bailed out... there is nothing stopping it from using the full extent of the law to ruin you / get its money back.

Repeat after me:

Life is not fair

The rich have rigged the system in their favor

The one who can afford the most lawyers and lobbyist usually wins

[quote]I can just let my cash sit in the bank for a bit but what I do know is that the opty cost of not having that liquidity and missing opportunities is pretty big. [/quote]

Looking for opportunities is fine, so long as you are completely willing to lose your entire investment.  If you aren't then safety should be the name of your game.

--

Steve

TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 367
Re: So why is it bad to take on debt?

Steve (srbarbour)

Would you mind elaborating on your investment strategy\wealth protection both for the short term assuming:

1. Fed and Treasury continue to prop up insolvent financials and other large companies (ie US auto makers). Fed keeps rates very low for the next year or two ( or until the T-bills go bust)

2. Obama wins next week and the Democrats win more seats in Congress (Democrats control WH + Congress + Senate). Congress goes on a spending spree in 2009 or 2010 (more stimulus, new WPA, NRA programs), soaring SS Outlays by 2011, etc

Thanks

Xflies
Status: Silver Member (Offline)
Joined: Aug 19 2008
Posts: 157
Steve, I think you missed my point... I wasn't suggesitng
that I was going to default on my bank. Remember, if I raise cash and do nothing with it for a while, I will only be down by a small amount of which represents the low interest rate. In fact, I can afford to pay the interest with just the cash that I raise from the mortgage. This would definitely be a losing proposition if I did nothing with the cash over the whole 25 year mortgage but if you and others here are so negative on things, I'm sure you could think of a few things to do with $800k. Personally, for those who are looking for some suggestions on what to do, I will come out and say that I think (opposed to what Steve may think) that going into debt at extremely favourable rates during a time of deflation is a GOOD thing. Keep the cash on hand, if you can, pay the mortgage payments without dipping into your principal (ie. the cash you took out) and wait patiently for something really good to invest in. You may not know what it is now but you'll know when it comes. 3-5% financing is too cheap to just give up if you can get it. switters Status: Platinum Member (Offline) Joined: Jul 19 2008 Posts: 744 Re: The Fed cuts rates to 1.00% - the war on savers continues Xflies, You may want to read this article by Karl Denninger before making up your mind. Here's an excerpt: Quote: “See, a refinance, which this is, converts your mortgage into a recourse loan. That means if you take their “great deal” and then default later on (e.g. you lose your job in the upcoming Depression) your wages can be garnished forever and, if you earn more than the median income, you can’t even get rid of the debt in bankruptcy.” http://market-ticker.denninger.net/archives/636-Stop-Paying-Your-Mortgag... Xflies Status: Silver Member (Offline) Joined: Aug 19 2008 Posts: 157 I guess I've got a longer term view here... even in 1930-33 If you had used opportune times to invest, you would have come out WWAAYYY better in the next 10 years. Unless you think we're going to the ways of the Amish for the next 25 years, my opinion is that you come out better by taking advantage of the fear rather than become a victim of it. Fortunately, I am in a good position of financial security so that is definitely something people should work into their decision making but I'll go out on a limb and suggest that the opportunity to invest if you had cash will outweigh the risk of never being able to invest your cash and declaring bankrupty 25 years later (although at that point, you'll at least have your herd of goat that the gov't won't be able to garnish). capesurvivor Status: Platinum Member (Offline) Joined: Sep 12 2008 Posts: 963 Re: I guess I've got a longer term view here... even in 1930-33 Hi Xflies, I, too, was wondering about taking out a mortgage on my paid-off house. My fear is that I am not going to be sharp enough to know 1) where to put the$ and 2) where to put it when the situation changes . The latter also asumes that I know WTF is going on when it happens. A tech guru said that it's not enough to be present at the beginning of a new paradigm unless you realize that it's happening.

My modest track record would suggest that filtering into gold stocks andcommodity funds now, even if they drop a bit during a deflation, to be invested during the apparently inevitable inflation following.  Good course?

SG

srbarbour
Status: Silver Member (Offline)
Joined: Aug 23 2008
Posts: 148
Re: Steve, I think you missed my point... I wasn't suggesitng

[quote]Remember, if I raise cash and do nothing with it for a while, I will only be down by a small amount of which represents the low interest rate.[/quote]

Plus any addendums, adjustments, and all the other tiny print additions the bank sneaks into the loan.

Also plus the costs associated with resell of the house, and potential maintenance required with time. Hence, you are probably at best, starting with 5%+ loss right there, and that is downright optimistic.

[quote]In fact, I can afford to pay the interest with just the cash that I raise from the mortgage.[/quote]

Ah, but before taking on an investment scheme like this, you really ought to be able to pay off the house directly out of pocket -- money generated by the loan itself discarded from this calculation.

That's what it means to say: Never invest money you aren't willing or able to lose.

If you can, then more power to you.

[quote]This would definitely be a losing proposition if I did nothing with the cash over the whole 25 year mortgage but if you and others here are so negative on things, I'm sure you could think of a few things to do with $800k.[/quote] Lets see, 800k... hmm, I could probably squeeze by with 20k a year. Ah, retirement! Yes, there are lots of good investments with 800k. Simple people like me care very little about being rich, and a lot more about having no obligations whatsoever. [quote]Personally, for those who are looking for some suggestions on what to do, I will come out and say that I think (opposed to what Steve may think) that going into debt at extremely favorable rates during a time of deflation is a GOOD thing.[/quote] You are right, I think taking on debt during a deflationary period is silly. The typical idea is to take on fixed rate debt in anticipation of an inflationary period. Thats because it easy to beat the interest rate on the previous debt with the yield on the new debt issued during an inflationary period. In any case, I do not, and never have seen a house as an investment. From a purely rational perspective houses deteriorate with time, therefore their value should logically fall with time. Personally, I refuse to be involved in any investment that does not fundamentally improve with time (or, at bare minimum, stays static). Given falling housing prices, a changing population growth dynamic, and inevitable political change in the housing markets... I'd be quite careful about any such investment. It is though, in the end, your game. -- Steve srbarbour Status: Silver Member (Offline) Joined: Aug 23 2008 Posts: 148 Re: So why is it bad to take on debt? [quote] Would you mind elaborating on your investment strategy\wealth protection both for the short term assuming:[/quote] My general strategy is: Live cheap and stay out of debt. History has shown it probably won't make me the richest man in the world, but I'll almost certainly end up quite well to do. I'm satisfied with that. But I'll give you my thoughts anyway. I'll warn you, I'm not a trader, and as such there are much better people to get specifics from than me. [quote] 1. Fed and Treasury continue to prop up insolvent financials and other large companies (ie US auto makers). Fed keeps rates very low for the next year or two ( or until the T-bills go bust) 2. Obama wins next week and the Democrats win more seats in Congress (Democrats control WH + Congress + Senate). Congress goes on a spending spree in 2009 or 2010 (more stimulus, new WPA, NRA programs), soaring SS Outlays by 2011, etc [/quote] ... In this nasty, and unfortunately reasonably likely scenario (I'll note spend a-lot is pretty much guaranteed regardless of candidate wins...). I'll say it outright, that it is very difficult to come out ahead in a failing economy. When everyone else is getting less and less, chances of getting more and more are slim. Even most expert traders will tell you that in a bear market, survival, not earnings, is the name of the game. Lets first note the following definites: 1) T-bonds will go bust in this kind of extended spending. That doesn't mean they'll become worthless (even if the government fails to pay for a while, it still might pay someday). 2) Heavy inflation will ensue, because the T-bonds backing most of the Fed's assets decline sharply in value. (No printing needed!). Depending on how bad the misspending, and the state of the rest of the world, the dollar might have a brush with death... but probably won't pass on. 3) As the silent majority, yawns, brushes the grit from its eyes and catches sight of the devastation, the resulting roar of the people will shake our political structure and economy to the very core. New laws will reshape everything in sight, and thus any prediction based on any historical evidence will become utterly worthless. Now, that we've grasped that, the question is what can protect your wealth or earn new wealth: * Precious Metals -- All of these are long time staples in periods of fear. Unfortunately, many people have already gotten here, and as such, the prices of many of these are quite high compared to historical levels. As such, any investor should expect potential loses when he -- and everyone else -- dumps them as the good times return. Check the charts to get a feel. Silver, gold, and platinum make up the known trinity. There are a number of other rarer and less known precious metals as well. Some of these, have extensive direct industrial use and thus have a higher probability of retaining or regaining peak values. My Suggestion: A decent place to sink money if you have a lot to spare and don't care about losing some of it as long as losing all of it is no longer an issue. Check every chart you can find to determine current prices to historical norms though. Some of these metals are a much better deal right now than others. Don't however, presume that any of them are automatically liquid, especially in large quantities. Silver and Gold though, will be the most liquid of the lot. You'll still have to trade them in for cash though, as stores don't and probably wont accept them directly. As a bonus, precious metals can shield you from inflation. They, however, offer no protection against deflation. The minus, don't count on ever getting a return. * Consumer Staples -- Some things never change. Humans have to eat to live. Our society is dependent on electricity and energy. Fresh water is a must. There are many investments into these areas, and with study, you can potentially own part of something likely to stay around for some time. Better yet, the government is far more likely to reward your investment in basic human staples during the 'flailing rage of the people' period than on many other things... like, uh, houses. Rule of thumb: If the no longer so silent majority is starving, the government will prop up food. If they are energy hungry, it'll find a way to make energy. Etc... Just make sure that your position looks like a good guy position to the uninformed masses. Otherwise you could end up steam rolled by government intervention. My Suggestion: This is a much riskier position, and you'd better do your research before jumping in. As with any investment, do your research and don't put up money you can't wave good-bye forever to. There are a huge number of other deals out there too. Some quite good, others not so good. If you want the crazy gamble, look no further than high-yield bonds. Not a safe place to put your money to be sure..., but if it survives some of the returns are out of this world. Again, I'm not a trader, and there are better people to talk to about these things, especially on the specifics. -- Steve TechGuy Status: Gold Member (Offline) Joined: Oct 13 2008 Posts: 367 Re: So why is it bad to take on debt? [quote=srbarbour] 1) T-bonds will go bust in this kind of extended spending. That doesn't mean they'll become worthless (even if the government fails to pay for a while, it still might pay someday). [/quote] For now my money is either short term T-bills (1 and 3 month), or cash. Going with long bonds is crazy since treasuries could crash (probably will, consideing the huge amounts of new debt the treasury is auctioning + the large amount of short term debt that coming due every day). [quote=srbarbour] Precious Metals -- All of these are long time staples in periods of fear. Unfortunately, many people have already gotten here, and as such, the prices of many of these are quite high compared to historical levels. As such, any investor should expect potential loses when he -- and everyone else -- dumps them as the good times return. [/quote] I have some PMs, but not very much, and I purchased when gold was cheap (about$290 per ounce).  The issues are:

1. Paper gold may be worthless, since its difficult to prove that a company actually owns the required physical gold to make good on all the paper redemptions. I suspect the most are as levered as the investment banks were with MBS and other junk bonds. Like other investment business, they don't care about OPM (other people's money). They are interested in making money at the expense of OPM.

2. Buying physical is expensive. Historically PM brokers charged a 7% commission fee on any physical PM transaction. 7% to buy and another 7% to convert back into cash. That was before the mad physical gold rush. Many PM brokers now have backlogs for months since PM coin and Bullion stocks have been sold out. I've see dealers charging huge premiums of hundred of dollars per coin (the panic premium)

3. The gov't charges huge taxes on Gold capital gains (about 30%). So lets assume that a gold coin costs $1000 (to make the math simpler) and that dollar value falls by 50% in one year. You pay 7% of$1000 to buy ($70) + 7% of$2000 ($140) to sell + 30% of$1000 ($300) in capital gain taxes. You end up with$1490 after commissions and taxes (assuming no state income tax or sales taxes). You may lose less with PMs but you won't prevent loss of buying power.

4. Its possible that the prices of PMs could fall. I suspect that when push comes to shove, consumers will convert their PMs back into cash to put food on the table and pay the rent. A economic crisis isn't just happening in the US, its happening everywhere. There is a good chance that people all over the world will start pawning PMs and Jewerly if they're out of work for any length of time. PMs are an  inflation hedge not a unemployment\recession hedge. When ever there is a commodity frenzy whether its oil, PMs, corn, or even stocks, prices usually come crashing back down. Consumers and investors are irrational and tend to buy at the worst possible time and sell at the worst possible time in panic attacks. I think we'll see  panic PM selling in the next 12 months, at which point might PMs could become a buying opportunity. It makes no sense to go panic buying PMs in a deflation environment which we are currently in. We need high inflation for physical PMs to be a worthwhile investment.

[quote=srbarbour]

* Consumer Staples -- Some things never change. Humans have to eat to live. Our society is dependent on electricity and energy. Fresh water is a must. There are many investments into these areas, and with study, you can potentially own part of something likely to stay around for some time. Better yet, the government is far more likely to reward your investment in basic human staples during the 'flailing rage of the people' period than on many other things... like, uh, houses.

[/quote]

One can only hoard so much consumer staples. I don't see how one can convert $100K's of cash into consumer staples. Plus, you must have the right storage conditions, other wise they may spoil. [quote=srbarbour] There are a huge number of other deals out there too. Some quite good, others not so good. If you want the crazy gamble, look no further than high-yield bonds. Not a safe place to put your money to be sure..., but if it survives some of the returns are out of this world. [/quote] Most of the high yield paper have multi year terms (2, 5, 10 & 15 year), and the odds are extremely poor that any business using double digit interest rate loans for financing today, will last that long. The odds are probably better with lottery tickets. Hell, even the quality CP is mostly junk. All of the rating agency were bribed to overrate corporate bond rates. Even the few AAA rated companies like GE are really junk. The real AAA companies don't need to borrow money or have very low yields that are not worth the investment. At least with Treasury bonds, there is state tax exemption. For now I will continue to keep in cash and roll over into short term Treasuries. Maybe the US treasury prices will crash and the yield will revert above the inflation rate. I don't see any other way to remain liquid and preseve principle (minus inflation). Everything else requires you to make a semi-long term commitment and I think its impossible to determine how this crisis will evolve. Bet on the wrong investment and you'll lose your shirt. Thanks for your suggestions. I asked since your posts were sensible, and I want to see if you had any good ideas that I haven't already though of. Xflies Status: Silver Member (Offline) Joined: Aug 19 2008 Posts: 157 Re: Steve, I think you missed my point... I wasn't suggesitng Oh Steve, I sure hope you aren't an investment advisor. You don't seem to want to look at the message behind the whole thread of the value in staying liquid. Owning your house outright isn't very flexible. The costs you are talking about in taking on a mortgage isn't that high. Maintenance has to be done whether you own the house or not so I'm not sure why you brought that up. I agree with your point about not investing money you can't afford to lose but it's such a blanket statement that it puts any sort of investment to shame... there's a whole continuum of risk/reward and it's not static. Liquidity and cash is king and as long as you don't invest all your cash in one spot or in something that isn't very liquid, then you should consider it amongst the whole range of ivnestment alternatives, and risk/reward. The capital raised from taking on a mortgage is a one lump sum, it's not meant to be spent in one year and should be used as a pool of cash available to make timely and opportunistic investments. The cost isn't that high and I would value flexibility and being cash flush over the cost of taking on a mortgage... one thing I would say is that one should try and negotiate the ability to pay back the mortgage with no penalties just in case you change your mind later on. I also never said that I would use the cash to buy real estate which is what you were inferring to when you made your last statement. If housing remains weak, wouldn't you want to transfer the risk of the value of your house to someone else like the bank? gregroberts Status: Diamond Member (Offline) Joined: Oct 6 2008 Posts: 1024 Re: The Fed cuts rates to 1.00% - the war on savers continues I found this video on the unfiltered news section of the Freedomforce website, it's about what people leave behind when foreclosed on, amazing and disturbing... I have no connection with Freedomforce but it's an interesting site some of you might enjoy. Something I've been doing lately is seperating 1981 and below pennies because they are mostly copper and IF we get hyper-inflation they might become valuable enough to buy something useful. capesurvivor Status: Platinum Member (Offline) Joined: Sep 12 2008 Posts: 963 Re: The Fed cuts rates to 1.00% - the war on savers continues  This runs somewhat counter to Chris's hypotheses; Mr. Roubini is no dope. any comments? SG The Coming Global Stag-Deflation - Roubini http://www.rgemonitor.com/blog/roubini/254148/the_coming_global_stag-deflation_stagnationrecession_plus_deflation So should we worry that this financial crisis and its fiscal costs will eventually lead to higher inflation? The answer to this complex question is: likely not. First of all, the massive injection of liquidity in the financial system – literally trillions of dollars in the last few months – is not inflationary as it accommodating the demand for liquidity that the current financial crisis and investors’ panic has triggered. Thus, once the panic recede and this excess demand for liquidity shrink central banks can and will mop up all this excess liquidity that was created in the short run to satisfy the demand for liquidity and prevent a spike in interest rates. Second, the fiscal costs of bailing out financial institutions would eventually lead to inflation if the increased budget deficits associated with this bailout were to be monetized as opposed to being financed with a larger stock of public debt. As long as such deficits are financed with debt – rather than by running the printing presses – such fiscal costs will not be inflationary as taxes will have to be increased over the next few decades and/or government spending reduced to service this large increase in the stock of public debt. Third, wouldn’t central banks be tempted to monetize these fiscal costs - rather than allow a mushrooming of public debt – and thus wipe out with inflation these fiscal costs of bailing out lenders/investors and borrowers? Not likely in my view: even a relatively dovish Bernanke Fed cannot afford to let the inflation expectations genie out of the bottle via a monetization of the fiscal bailout costs; it cannot afford/be tempted to do that because if the inflation genie gets out of the bottle (with inflation rising from the low single digits to the high single digits or even into the double digits) the rise in inflation expectations will eventually force a nasty and severely recessionary Volcker-style monetary policy tightening to bring back the inflation expectation genie into the bottle. And such Volcker-style disinflation would cause an ugly recession. Indeed, central banks have spent the last 20 years trying to establish and maintain their low inflation credibility; thus destroying such credibility as a way to reduce the direct costs of the fiscal bailout would be highly corrosive and destructive of the inflation credibility that they have worked so hard to achieve and maintain. Fourth, inflation can reduce the real value of debts as long as it is unexpected and as long as debt is in the form of long-term nominal fixed rate liabilities. The trouble is that an attempt to increase inflation would not be unexpected and thus investors would write debt contracts to hedge themselves against such a risk if monetization of the fiscal deficits does occur. Also, in the US economy a lot of debts – of the government, of the banks, of the households – are not long term nominal fixed rate liabilities. They are rather shorter term, variable rates debts. Thus, a rise in inflation in an attempt to wipe out debt liabilities would lead to a rapid re-pricing of such shorter term, variable rate debt. And thus expected inflation would not succeed in reducing the part of the debts that are now of the long term nominal fixed rate form. I.e. you can fool all of the people some of the time (unexpected inflation) and some of the people all of the time (those with long term nominal fixed rate claims) but you cannot fool all of the people all of the time. Thus, trying to inflict a capital levy on creditors and trying to provide a debt relief to debtors may not work as a lot of short term or variable rate debt will rapidly reprice to reflect the higher expected inflation. In conclusion, a sharp slack in goods, labor and commodity markets will lead to global deflationary trends over the next year. And the fiscal costs of bailing out borrowers and/or lenders/investors will not be inflationary as central banks will not be willing to incur the high costs of very high inflation as a way to reduce the real value of debt burdens of governments and distressed borrowers. The costs of rising expected and actual inflation will be much higher than the benefits of using the inflation/seignorage tax to pay for the fiscal costs of cleaning up the mess that this most severe financial crisis has created. As long – as likely – as these fiscal costs are financed with public debt rather than with a monetization of these deficits inflation will not be a problem either in the short run or over the medium run. Davos Status: Diamond Member (Offline) Joined: Sep 17 2008 Posts: 3620 Re: The Fed cuts rates to 1.00% - the war on savers continues CapeSurvivor: I'm no genius but here is my 2+2 on it: Greenspan: "Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom... The world economies plunged into the Great Depression of the 1930's." Roubini: "Thus, once the panic recede and this excess demand for liquidity shrink central banks can and will mop up all this excess liquidity that was created in the short run..." Belatedly or once the panic recede[s], mop up or sop up, excess reserves or excess liquidity, 1930s or 2000s: the net is still the net - a depression. The guy is smarter than I, but for me history is a better predictor. Not to get verbose here, but if the US has 654% more debt than earnings and its consumers (who account for 70% of GDP) are jobless and so broke they can't pay attention...then which of his 4 points matter? I may be wrong, but college professors like this make me grateful I didn't get past high school! End up with him and Ben and one might have trouble balancing a checkbook. capesurvivor Status: Platinum Member (Offline) Joined: Sep 12 2008 Posts: 963 Re: The Fed cuts rates to 1.00% - the war on savers continues Well, They don't call economics the "dismal science" for nothing. There are always really smart people with exactly opposing views; you only know who was right after the fact. It seems to me that we have to inflate eventually but Roubini's argument nullifies that. I guess you can't put all of your eggs in one basket ie. only gold. It does seem that deflation is coming for a while but...I never took an economics course either. To counter Roubini, here's another dude: Published October 31, 2008 | ##### Ahead of the Curve by Donald Luskin (Author Archive) # Inflation, Not Deflation, Is Looming Threat Here's the dirty little secret of all the rescue operations that have been carried out this month by government financial authorities around the world. They all take money. Lots of money. And that money has to come from somewhere. So when the U.S. Treasury says it will invest$700 billion to support the banking system, it has to be able to issue $700 billion in Treasury bonds. Someone has to buy those bonds. Someone has to think they're a good investment, at a time when most people don't think anything is a good investment. The Treasury's effort to restore confidence in banks depends on people having confidence in the Treasury. When the Federal Reserve says it will invest$500 billion in the commercial paper to support the short-term financing market, it has to print the money. People have to think that money's worth something, even though it's been freshly printed for the occasion. For the Fed to restore confidence by making money available, people have to have confidence in money.

These two things are closely related. A Treasury bond is an iron-clad commitment to pay interest every six months, and to pay the face amount at maturity. To pay in the form of money, that is. It's a riskless security, because the government has the power to print the money required to make the payments. But if the money is worthless, then the bonds are worthless.

The way the credit crisis has unfolded over the last two years, it seems that the focus of the trouble has moved from company to company, from security to security, from country to country. One problem gets solved, then another one crops up. Like leaks springing up in a dam, they just can't all get plugged. When all the problems have been solved, there's only one place for the credit crisis to go: to money. If that happens, then it's not just another leak in the dam; it's a dam break.

If people lose confidence in money, then it's all over. Money is all the rescuers have. When the money itself loses value, there's no one to rescue the rescuers.

What is money, anyway? It's a claim-check that can be presented for goods and services. If you're Joe the Plumber, then money is a claim-check on your plumbing services. Someone hands you a $100 bill, you have to give them some plumbing. So the amount of money in the world must bear some reasonable proportion to the amount of goods and services that it might claim, now and in the reasonably foreseeable future. If there's too little money, then there's not enough to buy all the plumbing services that are being offered, and the price of plumbing has to fall. That's called deflation. When there's too much money, then there aren't enough plumbing services to go around, and the price of plumbing goes up. That's called inflation. See where I'm going here? The Treasury is borrowing a ton to support this year's stimulus program, the housing bailout, the Fannie Mae (FNM: 0.93, -0.06, -6.07%) and Freddie Mac (FRE: 1.03, -0.09, -8.03%) bailout, and now the banking bailout. It all totals something like$1.5 trillion. The Fed's balance sheet has simply exploded over just the last eight weeks. It's gone from about $850 billion to about$2 trillion.

There isn't enough plumbing in the entire universe to use all that money. The only possible outcome is inflation.

I understand if you think I'm completely crazy at this point. How can there possibly be any danger of inflation whatsoever when the price of oil has been more than halved in the last three months? How can there possibly be inflation when the whole world is suddenly in a deep recession, and consumers have stopped spending?

How can there possibly be inflation when the spread between regular Treasury bonds and inflation-protected Treasurys, or TIPS, has gone negative? It's true. The yield on a five-year TIPS is actually higher than the yield on a regular bond, which means the market is forecasting deflation, not inflation, for the first time since TIPS started trading a decade ago.

That's certainly how Ben Bernanke sees it. In the Fed's public statement this week when it cut interest rates to 1%, it pretty much said that inflation is dead and buried, with a wooden stake driven through its heart.

What can I say? If you believe all that, I'm delighted that you have such confidence. I'm delighted you're so optimistic. Confidence and optimism are in short supply right now, to be sure.

But I think you're wrong. The U.S. Treasury is borrowing so much money — as are the treasuries of all the major countries — in order to support banking rescue operations, there's just no way that bond yields aren't going to have to go up. When that happens, the Fed and the other central banks of the world will probably decide to buy some of that debt, to keep rates low, so that the world can more easily pull out of recession.

That's called "monetization" of debt. It means that, effectively, instead of borrowing real money, the governments of the world will just print it. That always causes inflation. But the governments will do it, because they believe inflation is dead, so they'll think they can get away with it.

But the fact that they think inflation is dead will bring inflation to life. If you print enough money, you will get inflation. No matter how much the price of oil has fallen.

So what if the oil price drops by 50%? If the governments of the world print enough money, that drop won't last long. Neither will the recent drops in other commodities. That's the way inflation works. It's the way it always works. Governments print too much money. The price of everything goes up. That's inflation.

Now I'm not saying it has to rise to crisis proportions. It will happen slowly. A little bit at a time. We'll have plenty of time to see it, and avoid the worst.

But we'll see it later than we should. We'll see the first signs, and the second, and we'll ignore them. We always do. Then it will get worse, and finally we'll react. Hopefully, that day will come before inflation gets so out of control that we really do have a crisis on our hands.

The best way to play it is with gold. Lately gold has been acting more like lead. It's fallen along with everything else. Cash is king right now.

But gold is the single most inflation-sensitive thing in the world. I think before a year has passed, gold is going to start sensing the inflationary threat I'm talking about. When it goes back to the old highs around \$1,000, and then just keeps on going, remember: You heard it here first.

Donald Luskin is chief investment officer of Trend Macrolytics, an economics consulting firm serving institutional investors. You may contact him at [email protected].

capesurvivor
Status: Platinum Member (Offline)
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Posts: 963
Re: The Fed cuts rates to 1.00% - the war on savers continues

Here's a 5 cent response to Roubini, brief and to-the-point by a regular dude on a stock site thread:

Roubini is saying that the US government will opt for much higher taxes in the future rather than allow inflation to spiral higher -- if that turns out to be true it will be a first.

His assessment of the politics of debt and inflation are wrong for two reasons.

1. There is no global pool of savings to tap that is large enough to bail out the US economy much less the global economy.

2. Political pressure always works in favor of inflation when fiscal discipline and/or far higher taxes would be required to keep inflation in check.

He is saying that it would be stupid to adopt policies that will lead to higher inflation -- but guess what, stupid has always been the order of the day. Unless you think that Americans will blithely accept decades of far, far, far higher taxes AND reduced government services, then stupidity will win out every time -- and that means inflation is here to stay.

Woodman
Status: Diamond Member (Offline)
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Posts: 1028
Re: The Fed cuts rates to 1.00% - the war on savers continues

As a simple guy reading the posts above I'm getting that one argument is inflation will be avoided if the goverment finances the bailout through debt rather than monetization.  The counter argument is that the government will have to print more money because we cannot borrow or pay back all that debt, higher taxes are politically impossible, and there no sufficient pool of savings to draw from; therefore inflation is ultimately coming.

How much of the big bailouts so far have been funded by debt and how much by monetization?

johnlh
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Re: The Fed cuts rates to 1.00% - the war on savers continues
This did not surprise me. What did surprise me is that they can cut the rate and have to a negative number.
johnlh
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Posts: 2
Re: The Fed cuts rates to 1.00% - the war on savers continues
I was an economics major in college. The most important things I remember are that economics is not a science. Economist can be all over the place and have great credentials and still be 100% wrong. Our guru of grus Alan Greenspan had to admit before a Congressional Committee he was wrong.  In our current situation we can only hope that government does not make things worse. Some of the same people who helped us get into this mess, IMHO, such as Barney Frank is now a Chief Inquisitor in the epic entitiled "The Blame Game".

I posted this under a different thread as well but this is an important read, especially the end of the article (I just posted the first few paragrpahs

.

# Plumbing the Depths of Depravity

### by Rob Kirby | October 29, 2008

Print

First, for a bit of historical context, a little bit of fact-finding pertaining to Henry Paulson, complements of my friend, Jesse:
“I didn't know he was a member of the Nixon White House as his first 'real job.'

In 1970, fresh from the Masters program of the Harvard Business School, Paulson entered the Nixon administration, working first as staff assistant to the assistant secretary of defense.

In 1972-73, Paulson worked as office assistant to John Erlichman,assistant to the president for domestic affairs. Erlichman was one of the key figures involved in organizing President Richard Nixon’s notorious "plumbers" unit that carried out illegal covert operations against the president’s political opponents, including espionage, blackmail, and revenge. Erlichman resigned in 1973, and in 1975 he was convicted of obstruction of justice, perjury, and conspiracy, and was imprisoned for 18 months.

Utilizing his connections, Paulson went to work for Goldman Sachs in 1974. In a 2007 feature, the British newspaper the Guardian wrote, "Not only was he well connected enough to get the job [in the Nixon White House], but well connected enough to resign in the thick of the Watergate scandal without ever getting caught up in the fallout. He went straight to Goldman back home in Illinois."

Birds of a Feather Fly Together: The Plumbers Live On in Infamy

[/quote]
Doug
Status: Diamond Member (Offline)
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Posts: 3125
Re: The Fed cuts rates to 1.00% - the war on savers continues
The current administration is littered with retreads from the Nixon and Reagan administrations.  A more thoroughly corrupt and inbred group of idealogues would be difficult to find.
capesurvivor
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Posts: 963
Re: The Fed cuts rates to 1.00% - the war on savers continues
Well put. SG