Showing posts with label Fed. Show all posts
Showing posts with label Fed. Show all posts

Wednesday, October 31, 2007

Before US Fed Rate Cut Announcement!

Firstly, the DJI chart and this week S1, R1 & N lines. Tonight( Singapore Time ), Fed will make the announcement. Most people will hope for a 0.25% rate cut and stock market tomorrow will rally to new highs ( Just like what had happen 6 weeks ago ). Personally, I feel that even if Fed drop rate by 0.25%, I don't think market will rally again.
It is my wish that Fed don't make this cut as we see the effect on Crude Oil price & USD. Recently, I read an article on "Inflate or Die". In the article, it explained the problem that Fed are facing and why the choose to cut rates. But I rather the market die now then later. As the problem will get bigger and the bust will affect deeper ( more people will die or suffer ).
Let's just see what happen later....................................................................................

Wednesday, September 19, 2007

The Aftermath of Fed Making 0.5% rate cut.

Last weekend, I was hoping that Fed don't make the cut, but Fed made a 0.5% cut.
In the coming weeks, we are likely to see two events happening.
1. Weak US Dollar
2. Inflation, ie. Crude Oil hitting US$90 or higher.
Although, a collapse of US was unlikely to happen but at least in the next few months a weak USD are bound to happen. Most Foreign Players buy in USD for 3 things, Properties( Long Term ), Bonds ( depend on the years they buy ) & Stocks ( Short Term ). You guess what will happen next/latter.
A common practise for Central Banks around the world, is to use Interest Rate to control Inflation Rate. Recently, we are seeing China's inflation problem spreading globally. With the rate decreases, Commodities will raise lead by Crude Oil.
IMO, what Fed had did was to solve a current problem. They are lending money to gamblers ask them not to gamble again...
I have added S2 into the chart.