Janet Yellen vs USDA

[errolanderson]

Forget the USDA report, the big mover-shaker may be Janet Yellen and the drawn-out saga called the U.S. Federal Reserve rate hike.

Should the Fed actually hike rates in December (while all global central bankers are easing monetary policy including Carney; Bank of England), the U.S. dollar could soar triggering a selloff in basically anything the U.S. export (including grains).

U.S. wheat exports are already at a 1970 low due to the too high dollar.To me, a Fed rate hike is insane and highly risky policy. But Wall Street bank pressure may be the root. This decision of a rate hike could have a devastating impact on the U.S. economy ie: spin it into recession if it does not go well. Very high stakes global poker game right now.

To me, the real heavy-weight now in the room is the U.S. Federal Reserve, not USDA.

[boarderbloke]

Why is the fed so desirous to raise rates? What is the result they're hoping to accomplish by raising rates?

Is it simply to build a little cushion so the Fed can maneuver policy more easily down the road? Is it that they feel the U.S. economy is doing so well right now(they're opinion, not mine), that there is a window of opportunity to build a cushion now, before the economy slows? Raise rates now, so you have room to drop them later when the U.S. economy slows?

[cottonpicken]

I kind of think they will raise and inject at the same time. Sort of like hitting the gas and the brakes at the same time but who the hell knows at this point.

[errolanderson]

And to add to the pile of bizarre economics and the heightened risk for investor yield . . . .

U.S. equities soar toward historic highs or into historic highs (NASDAQ) in October when this is now registering as the worst U.S. earnings season since 2009.

http://www.bloomberg.com/news/articles/2015-11-04/this-is-the-worst-u-s-earnings-season-since-2009

[Hamloc]

What amazes me is that the U.S. dollar is still the go to currency in the world. When Obama came to power the US debt was around 10 trillion and about 60% of GDP, now it is over 18 trillion and over 100% of GDP and yet the U.S. dollar continues to strengthen. For a comparison Canada has roughly 10% of the U.S. population, if Harper had added debt at the same rate since 2008 it would be 800 billion dollars, Canada would be a basket case financially then.

Sorry, I got a bit off topic, Errol I agree that the U.S. dollar will certainly gain strength if interest rates go up and make US exports less competitive. The U.S. dollar is already too high compared to other currencies and has negatively affected grain prices and exports.

[ajl]

If the US allows interest rates to rise modestly (50 basis points) the US can buy back all the assets that have been sold to China over the years. A modest rise in US rates would do a lot of long term good and the US economy is stronger than every one else right at the moment. Even Airbus is building a plant in the US at the moment a problem the rest of the world would kill for. A rise in US rates would of course be a death blow to the ROW. (rest of world) as they have to fund $US debt with joke currencies so that is why foreign interests are lobbying the FED hard right now. The anti rate rise crowd is just like the anti can't end QE crowd two years ago. QE ended thank goodness and the effect was positive.

[cottonpicken]

Ya butt......all that debt has to be repurchased as it matures at almost no yield the point of qe was to keep yield low and buy the debt but because there wasn't enough money or dumb ****s to do it.

If rates where say ten percent half of what they where in the early eighties our society would be toast look at the numbers.

That kind of scares me.

[errolanderson]

The emerging market contagion risk would be immense if the Fed would hike 50 points. This would sweep right back onto U.S. shores. The world economy is much bigger than that of the U.S.

U.S. 3rd quarter GDP is 1.5% . . . this is hardly stellar.

QE was a bust in my opinion as it did not do what it was supposed to do . . . trigger inflation in an effort to run ahead of the debt curve. But QE has now triggered a global currency war which has exasperated attempts for global debt control.

[cottonpicken]

It was also reactionary in nature,it only buys time kind of like chemo and cancer

[farmaholic]

I may not contribute to these threads or if I do contribute, anything of value. But I do read them hoping to gain some insight from other peoples opinions.

dumb what? LOL That I understood.

[errolanderson]

Fed unaccountability 9.0

https://www.youtube.com/watch?v=q9pnc7IXpC0

[ajl]

Canadian government debt is currently lower than the US but won't be in 5 yrs. Canadian government debt is held by Ontario and Quebec. Canadian private debt is higher than the US however making our overall debt to GDP worse than the US. Japan and the Netherlands lead the world in that department. So the US would sustain a small increase in interest rates but it would flush the rest of the world. Who has an economy performing well right now?

[cottonpicken]

If you really want to have a laugh if your a sicko like me or a cry if your normal. Look at the gaap accounting that applies to everyone except governments. It is completly off the rails there is no way out except maybe technology.

[errolanderson]

BOOM! released at 6:30 MDT this morning.
U.S. job creation in October came out like 271,000 jobs as compared to the average 187,000 trade estimate.

Market reaction . . . U.S. dollar surges pulling precious metals, the loonie, Euro and crude oil lower.

Good news is bad news for the stock market. Talk that Yellen will hike rates 1/4% in December is now placing some selling pressure in equities.

U.S. dollar strength is not good news for grain markets . . . .

[cottonpicken]

Hell of a move in the dollar. Chatter is December rate hike is a lock.

I imagine panic and doom in emerging markets.