Helicopter Sighting
October 27th, 2008 by 
reality
The chart is the adjusted monetary base, currency plus bank reserves. Mr Bernanke is true to his word. The helicopters are in motion.
I have long since prognosticated that we will have ZIRP (Zero Interest Rate Policy, a term coined by the Bank of Japan) here in the US. (BTW, that prognosis from Feb. 2006 was not too far off, was it?)
People are now talking about this possibility, even at this week’s Fed meeting. Personally, I think that it is a bit soon but hey, I could be wrong. I think the price inflation vs. deflation argument is pretty much over, though. Now it is just a matter of waiting for the numbers, but the asset price deflation is so violent that it is hard to imagine that labor prices alone will prevent overall price deflation being reported.
Posted in Inflation & The Dollar, The Fed | 
October 27th, 2008 at 1:42 pm
My 5/1 ARM (3.75%) readjusts in July 2009. How low did Japan’s mtg rates get during their ZIRP?
Not only do I have to time the stock market (3% drop in the last 10 minutes of trading today for my QQQQs) - i have to time my mtg refinancing. Keeping this up, rather than a 30 day lock in mtg rates, it’ll be a 30 minute lock period.
October 27th, 2008 at 1:51 pm
In the low 2’s for a fixed-rate, I believe, but off the top of my head so check for yourself if you really care.
October 28th, 2008 at 4:31 am
Thank you. We’ll see if rates continue to drop.
Govts are doing strange and bold things in these times. Will we have the US to Iceland mtg carry trade? Cash out and max out US$ when I refinance my house for ~5%, then plop it in Iceland for 18%.
Iceland Central Bank: 18% Rate!
http://bigpicture.typepad.com/comments/2008/10/iceland-central.html
Off topic: I’m optimistic the market is at a bottom for the next 3-6 months. Changes in direction often occur at the beginning of a month.