New bailout question.

[JustJason]

I'm not much of an economist... So I thought i'd ask.

Does anybody think that the bailout is going to drive up the price of oil, for us?
Doesn't adding to the already rediculous deficit, essentially make every dollar worth less on the open market? I mean, the fed is essentially printing up 700B dollars out of thin air right? Since the dollar is on the pretty much on the oil standard, wouldn't that mean that it takes more american dollars per barrel of oil?

Any thoughts?

 

[JB]

Re: New bailout question.

The oil market is too big to be affected seriously by a mere $700Billion investment.

People need to understand that what is proposed is not a giveaway, it is the purchase of loans in danger at way below face value.

When we (the USA) have done this in the past we always made a profit on it. I own a bunch of CMOs (collateralized mortgage obligations) and a couple of mortgages and am in no danger of losing any bux. In fact, I expect to make a profit.

 

[Fly Rod]

Re: New bailout question.

The bailout should have no effect on oil prices going up or down.
Weather (storms) OPEC and spectulators are responsible.
Real estate is always up and down cycles, and if the government is smart with this bailout on the resale of depressed properties, market turns upward and the government puts properties back on the market in small quanities, not to flood the market, there may even be a $ return on the bailout. And with the depressed properties gone the real estate market will improve and so should the economy start to rebound and that could mean interest rates could rise.

Remember that the FED RATE does not impact 30 year mortgage loans, the BOND MARKET does, which is very volatile. Even though arms and equity loans at the moment have low rates you want to be careful when the fed rate goes up.