has the us lost control?, page-46

Hi jnr trader,

just a couple of things that I would like to comment on

you said

Aus actually have the ability to rise interest rates significantly, to combat this problem, and that they will, int rates need to be 15%++ for home prices to again become affordable for the average aussie

my reply
at 15% interest rates, houses would probably be worth less than they are now, but they would be considerably less affordable for the average aussie, and anyone who bought in say the last 5years would probably not be able to meet their interest payments, interest is the biggest cost to buying a house.


and this

basically, IMO, the bottom line is, USA must raise interest rates fast, to 10 % by 2010 end, let all the financial inst fail and banks that cannot cope with these interest rates and all the businesses that spent up too big in the boom. Convert these employed people into manufacturing jobs to help pay off the huge debts they are in

OR

continue to borrow and print money and eventually, the USA will move into a hyper inflationary depression, where the value of the dollar will become worthless (or about $20) and no longer the reserve currency.

my reply
IMO it would not just be banks and financial institutions failing, the government, the people and the economy would fail as well, the US cannot raise rates substantially, they may go to 1pc, maybe 2pc at a pinch, but 10pc, no way!
The US cant meet their interest payments at .25% now (without borrowing), their total debts are just to high to allow rates to rise substantially.
Manufacturing jobs would be destroyed with this scenario.

They will try to borrow and print money, but will runn out of lenders, apart from the carribean banks, IMO and this is just a guess, the best way out for the states (if there is a way out) would be to stealthfully devalue their currency, which is happening now, but the rest of the world is now catching on to this and it will soon no longer work, I can only see one way out of the corner that they have painted themselves into, and that will scare the hell out of China and the savers of the world.

cheers grant