Low Interest rates wreaking havoc!

[buylowsellhigh_IHB]

For some reason, I don't see interest rate drops as helpful to the economy. Its true, the fed is helping to revitalize the housing market and prevent a crash, but imo, whats done has already been done, and the drops are going to delay the inevitable. Perhaps I'm narrow minded or ignorant, but i dont see how it makes sense to bail out irresponsible borrowers at the cost of everyone else... Our currency is getting flushed down the toilet, and people are rushing into commodities. Gas will be more expensive, so will everything else that is a commodity.





I own an import/export business, and my cost have begun rising due to the interest rate and raw materials price, and the increased overseas sales dont even begin to cover it.





Thinking back at it, the increased cost of doing business is more than the price I'd pay for higher mortgage due to higher interest. Am I being selfish?

 

[Newport Trojan_IHB]

I also do importing and I am noticing that most suppliers are tightening their window as far as how long they will honor a quoted price. They have directly linked this to the currency volatility around the USD. I have looked into hedging and possibly gaining an advantage by using USD/CNY option contracts. Any experience with this hedge or any other methods?

 

[buylowsellhigh_IHB]

I'm not sure of the type of hedging you can do with the CNY, because their money is so tightly controlled by the government. Maybe theres options contracts you can buy for the raw materials/similar currency? One of my vendors just got shafted by the currency depreciation.... On average he has about $1M of terms outstanding. When the USD loses 5% like that, its an instant loss on the open account =X