Posted on 09/25/2022 4:13:07 PM PDT by MtnClimber
No matter who wins, the American people lose.
The game of chicken, learned by most teenagers, provides a reasonable description of current financial market conditions. The Federal Reserve is playing chicken with financial markets.
Usually the game of chicken determines a winner by whoever "blinks" first. In this case, there can be no winner, at least long-term. In order for the Fed to win, it must crash markets. In order for markets to win, they must call the Fed's bluff. The twist in this game of chicken is that the American people lose regardless.
If the Fed "wins," inflation presumably comes back under control, but market values destroy the retirement assets and jobs of many. If markets win, inflation continues to destroy the standard of living of all.
Obviously, this game involves a third party who never intended to play: American citizens.
Where Do We Stand Now?
Another rate hike of 0.75% this week by the Federal Reserve. The dollar, because of higher interest rates, is strong against other currencies, but financial assets are weakening.
Everything was down (red) this week and seriously so! Since the closing prices of July 26 (the day before the first of three rate increases), all tracked securities are negative and becoming increasingly so. Markets reluctantly believe that Powell means what he says.
(Excerpt) Read more at americanthinker.com ...
It was time to sell a few weeks ago (growth stocks will be hit the worst IMO) and then wait until the recession hits bottom to bargain shop.
The article makes the mistake of equating the stock market and the economy.
They are related but not the same.
A rock and a hard place thanks to reckless government spending. Increase the Fed rate to reduce inflation and bring on the recession or let the economy overheat and savers punished with high inflation.
What would actually get the Feds attention is if the Bank of Japan (BOJ) decided to buy their oil and gas from Russia instead of the US and Western countries. Russia would allow them to purchase their energy in JPY rather the USD. They would no long need to hold US Treasuries as a reserve and could sell a lot of their current holdings.
The JPY has depreciated to historic low leveles from the dollar and if the BOJ no longer needed to use USD it would reduce their rising energy costs. Of course, interest rates on US Treasuries would rise which would impact all US interest rates and increase the debt service costs of everyone.
The Fed would need to stop its QT and go back to buying Treasuries to keep the prices up and rates down. This would undermine the Fed’s efforts to control inflation and would be a disaster.
BTW, this could also be completely prevented by going back to a sane energy policy in the US which would also do wonders for the global inflation problem.
You are correct but what the electorate doesn’t understand is that a congressman’s best friend is inflation as it allows them to raise taxes on their constituency without passing a bill. More money to spend for congress.
Article 1, section 8
No State shall make anything but Gold and Silver coin a tender in payment of debts
The States still have the Constitutional Authority to put the Den of Vipers out of business by Criminalizing paper currency , yes it would be CWII immediately started by fedzilla
Having no consequences is fun.
The looters never know when to quit stealing.
Exactly. The national debt, along with all the other "entitlements" that aren't even included, is going to be paid off using inflated dollars.
The alternative is to put us on a course of incredible unemployment, failing businesses, widespread foreclosures, and never-ending government mandates.
The solution, in so far as there is one, would require massive readjustments in energy policy, a laser focus on economic productivity, and a rejection of global warming nonsense. I don't see this happening until there is far more widespred suffering than is going on today. The survival instincts of Americans seem to have been suppressed by progressive nonsense.
Mitch Nancy J.Hiden and the rest of the Chugite agencies bureaus leaches know that to pay for their free everything life, 87k agents will seal the deal.
That’s why none of them are screeming or even talking
“No matter who wins, the American people lose.”
That is an accurate description of the situation. Once this country is picked clean, they will let it dry up and blow away. The problem is that it’s all already falling apart.
Powell should have been slightly increasing rates years ago . NOw that inflation is out of control he has to go extreme in the opposite direction. What a doofus. And this guy is supposedly some monetary expert?
I tell you, picking people for high level govt positions was definitely NOT trumps strong suit.
Powell should have been slightly increasing rates years ago . NOw that inflation is out of control he has to go extreme in the opposite direction. What a doofus. And this guy is supposedly some monetary expert?
I tell you, picking people for high level govt positions was definitely NOT trumps strong suit.
The choice is high inflation or a recessionary economy. Smooth landings are luck.
The FED’s job is to choose, they did. Now the FED and the rest of us get to hope we don’t get one from column A and one from column B.
We have at least 6 more months of decline. Once the officially say recession you’ll see markets drop big.
Personally think they are prepping to bring about the new Federal Digital Currency, Biden signed that EO to bring it into use by next year.
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