Sunday, September 16, 2007

Entry for July 16, 2007

Bernake will naturally enforce the ideas of inflation, which in turn will potentially drive the dollar lower. In regards to the sub prime problem it is true as Greenspan has said, that the job of the Fed also does include preventing systemic risk. Though in theory, it is not the job of the Fed, and when speaking to the house, inflation will be the main discussion though, he will no doubt have to address sub prime issues, as that issue will be pressed on him. The up comings reports PPI and CPI will definitely be market movers. Because of these i expect the interest rate yields will be rising due to this environmental. Volatility is still strong in the bond markets. If demand from abroad continue to decrease for US treasuries, this will also add to the increase of yields. One can expect other currencies to continue an upward trend. Though as it is not the far future yet, the United States still is a great place and has many opportunities for investment, though in the short term i expect investors to seek better investments else where. I expect all these recent reports of sub primes and them starting to hit prime times for the public to see, will have a greater affect than i had expected. If the public starts getting wind of this this can not bode well for the market. Though potentially good for bond prices to rise once new on the economy stabilizes.
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