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Posts by "speculator"
804 Posts Total by "speculator":
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Posts by Anonymous "speculator":
The position of the debts can only get better if economy improves greatly otherwise more debt required to finance country. Inflation, interest rate hikes and gasoline inflation would all contribute to depressed economic activity leading to further increase in UK borrowing in 2011 and beyond. There is no way in hell that consumers would feel indifferent on the spending if interest rates rose even 1%!!!!! they will become far more cautious on their spending habits.
High gasloine prices due to ever increasing taxes coupled with general inflation and rising interest rates will cause the double dip many economists expect. Moreover, wages are barely going up but taxes have so the consumer will be hardly hit when BoE hike as half of mortgages are linked to the rate and currently enjoying extra income to spend.
i think investors to some extent are now not believing in the dollar rally as fed havent done any recent tighening and greece rescue forming.
Fed is so smart, they are trying to keep credit market and dollar stable. Why would they want to increase their borrowing costs so soon..they just keep the market guessing which is bad for fx traders of course. but on the other hand they want to keep foreign treasury investors happy by preserving the dollars value by threatening to hike any time soon. Also, im sure they would be worried about a run on the dollar as its reservce status could become a potential reality. so they are just trying to have a balance it seems.
dollar is not currently thought to be replaced as a reserve currency as it was 2009. euro was the contender within the few that have a chance.
fed has warned it may hike rates at any time (immediate term)
no signs of hike for ECB/BoE
inflation is very low in the US. Higher real interest rate for US bond holders.
euro has failed as a credible monetary system due to smaller/weaker members
political uncertainty in uk
high uk debts:GDP
risk of euro breaking up in future
peaking in equity markets/gold
dollar in a mutli year bull (debatable, ashraf)