The plunging dollar is going to force the hand of the Bernanke FED to raise rates EVEN MORE than they have been willing to do so far...
Simply put...this is 1968 all over again...there is a massive unwinnable and unfunded war that is being financed "off the books" by the Republican Kongress. The trade deficits is not even being addressed for the disaster it promises to the US economy... Greenspan would only tell us during his Bubble Daze...that "eventually" the dollar will fall and the situation will be "self corrected" in the marketplace...
Of course the untold secret is that Americans will have to accept a much lower standard of living...and the inflationary effects of a plunging dollar will cause inflation...first in commodities...then spreading to the rest of the economy.
But any increase in rates will ipso facto mean lower asset prices as real economic assets produce less cash...even as bank deposits grow and saving starts to pay again...! See the period from 1978 to 1981 for details...!
YES 16% CD's ARE POSSIBLE...INDEED THEY ARE COMING...AS IN THE LATE 1970's...
AND THAT IS WHY THE 1970's WERE A DOOMSDAY SCENARIO FOR THE STOCK MARKET...AND THE BROKERS WHERE "BROWN BAGGING " THEIR LUNCHES...NOT DRIVING AROUND IN LIMOS...
THE 1970's ARE COMING BACK... BUT, YOU KNOW SOMETHING....? THEY ALWAYS DO...
THE BOOMERS CAME INTO THE ECONOMY WITH AN INFLATIONARY RECESSION...AND NOW THEY WILL GO OUT WITH AN INFLATIONARY RECESSION...
