Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

Skip to comments.

Kyle Bass Believes Fed Will Be Forced To Abandon Hiking Rates As Stocks Crash
Zubu Brothers ^ | 1-14-2022

Posted on 01/13/2022 5:10:48 PM PST by blam

click here to read article


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-8081-90 next last
To: politicket; Lurker

Ya, I’m concluding that “money” is now mostly debt. Perhaps oversimplifying, seems the Federal Reserve creates money by the math $0 = $1 + -$1. They start with nothing, loan a dollar, and note that someone owes them a dollar. So yes, once all the accounts get balanced out (trillions of dollars) it all returns to $0.

Of course the details are more complex, injecting real M0 money (physical currency) and other real value into the system, but on the whole a dollar (the virtual stuff we claim to have, not the paper & coin we mostly don’t) is a promise someone somewhere will pass a dollar back thru the vast chain of debt and it all returns to what’s left of M0. Of course, settling up won’t happen - it all collapses at some point, like the loan guarantee debacle when a bump made everyone realize they were insulting themselves with nothing.


21 posted on 01/13/2022 5:52:30 PM PST by ctdonath2 (Statistics don't matter when they happen to you.)
[ Post Reply | Private Reply | To 15 | View Replies]

To: Organic Panic

Whew. I dunno but there’s an old axiom that says don’t bet against a streak. I think I read that the price of gold is rising so if it were me, and I owned gold, I would not sell at this time.

But seriously I am not someone who can reliably give investment advice. I’m not qualified.


22 posted on 01/13/2022 5:52:45 PM PST by be-baw
[ Post Reply | Private Reply | To 17 | View Replies]

To: dynoman
Wow you better explain that a bit more.

Would be happy to. You mean about money disappearing if all debt was paid off?

23 posted on 01/13/2022 5:54:11 PM PST by politicket
[ Post Reply | Private Reply | To 20 | View Replies]

To: faithhopecharity

“the entire federal government financing scheme would crash with higher rates”

The financing scheme would change & may crash, but that doesn’t mean cheap money is here forever.

Here are the top 6 cumulative outlays for 2021 in billions.

1) Income Security 1,649
2) Social Security 1,135
3) Health 797
4) National Defense 755
5) Medicare 696
6) Net Interest* 352

* The Net Interest category could double and I still won’t worry about it. Look at all that fat above it.

I think rate hikes are coming, regardless of what naysayers think.


24 posted on 01/13/2022 5:55:21 PM PST by unclebankster (Globalism is the last refuge of a scoundrel)
[ Post Reply | Private Reply | To 3 | View Replies]

To: ctdonath2
injecting real M0 money (physical currency) and other real value into the system

Physical currency is nothing more than a representation of Treasury bills, notes, and bonds.

If that debt were paid off then currency would disappear.

25 posted on 01/13/2022 5:55:55 PM PST by politicket
[ Post Reply | Private Reply | To 21 | View Replies]

To: dynoman
Here's an interesting article you might enjoy, by the Bank of England:

Money in the Modern Economy

26 posted on 01/13/2022 5:58:11 PM PST by politicket
[ Post Reply | Private Reply | To 20 | View Replies]

To: unclebankster
I think rate hikes are coming, regardless of what naysayers think.

Look at the Fed's latest monthly H.4.1 report and let me know if you still think the same.

Fed H.4.1 1/13/2022

27 posted on 01/13/2022 6:00:21 PM PST by politicket
[ Post Reply | Private Reply | To 24 | View Replies]

To: politicket

Sorry - meant weekly


28 posted on 01/13/2022 6:00:41 PM PST by politicket
[ Post Reply | Private Reply | To 27 | View Replies]

To: blam

This countries corporations are going to be forced to do what Trump wanted them to do.

Bring all manufacturing back here.


29 posted on 01/13/2022 6:02:25 PM PST by crz
[ Post Reply | Private Reply | To 2 | View Replies]

To: unclebankster

I think rate hikes are coming, regardless of what naysayers think.


What are the options?

interest rate increases?

inflation

tax increases.

door 1, 2 , or 3?


30 posted on 01/13/2022 6:04:49 PM PST by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: blam
Prices have climbed so high, so quickly now, in a legitimate political party not run by corrupt radical Democrat misfits, they'd be screaming for this stooge to be removed before he can cause further damage.

They'd be on CNN telling anyone who'd listen Biden was a terrible mistake. But they're not. That tells me they support being looted by government, they support sky high prices, they support open violent borders, they love deadly military catastrophes, they support turning a pandemic into a dictatorship, a 3 ring circus of lies, endless threats, they support high crime, look at the big cities...they want a shaky risky economy etc, etc... Are Democrats and all Republicans outraged about this disaster? No, for most these posers, this is all business as usual. They got theirs.

31 posted on 01/13/2022 6:05:36 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
[ Post Reply | Private Reply | To 1 | View Replies]

To: politicket

“You mean about money disappearing if all debt was paid off?”

Yeah.


32 posted on 01/13/2022 6:06:11 PM PST by dynoman (Objectivity is the essence of intelligence. - Marilyn vos Savant)
[ Post Reply | Private Reply | To 23 | View Replies]

To: dynoman

Check out the link I posted from the Bank of England. Straight from the horses mouth, as it were...Fed does things exactly the same way.


33 posted on 01/13/2022 6:11:23 PM PST by politicket
[ Post Reply | Private Reply | To 32 | View Replies]

To: blam
Kyle Bass agrees with Gundlach (and the market): “The Fed can't raise rates more than a 100-125 bps before they have to stop”

They raised the FF rate between June 2004 and July 2006 from 1.00% to 5.25%.

34 posted on 01/13/2022 6:29:55 PM PST by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 1 | View Replies]

To: politicket
A credit card purchase creates new money in the economy.

Paying off a credit card destroys money.

So what?

If all debts were paid off then there wouldn't be any money.

Why would all debts ever be paid off? What would people do with their savings?

35 posted on 01/13/2022 6:35:33 PM PST by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 12 | View Replies]

To: PeterPrinciple

Peter,

Good points on all 3. You mentioning tax increases perked my interest.
I’m actually surprised the democrats aren’t proposing more tax hikes.

Tax hikes without recycling monies immediately back into the economy are anti inflationary. I prefer interest rate hikes instead of tax hikes, especially when democrats have control of Congress.

Democrats like to nickel & dime producers, its what they’re good at.


36 posted on 01/13/2022 6:36:50 PM PST by unclebankster (Globalism is the last refuge of a scoundrel)
[ Post Reply | Private Reply | To 30 | View Replies]

To: politicket
The Fed is carrying trillions of debt at face value on their balance sheet.

The "slight" problem is that the debt is actually toxic and worth zero.

It's US Treasury debt and guaranteed MBS. Why is it toxic?

They can't sell it. They can't give it away. It's no different than the toxic waste at Fukishima.

Why would they have to do either?

37 posted on 01/13/2022 6:40:49 PM PST by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 13 | View Replies]

To: politicket
I disagree with the assertion Bass makes regarding oil. It's only high right now because of the move to alternative energy.

I don't think so. Oil prices are high because we've had more than 5 years of tremendous under-investment in oil & gas exploration and refining. All the money has been going into green energy, and we are NOT getting a proportional return on the money.

The MOMENT global demand exceeds what the greedy Saudis can produce, prices will ROCKET up. After that, the price might crash again. But, not before we repeat 2008.

38 posted on 01/13/2022 6:41:30 PM PST by SomeCallMeTim ( The best minds are not in government. If any were, business would hire them!it)
[ Post Reply | Private Reply | To 7 | View Replies]

To: politicket
Physical currency is nothing more than a representation of Treasury bills, notes, and bonds.

If that debt were paid off then currency would disappear.

If someone else pays off their debt, why are my $20s disappearing?

39 posted on 01/13/2022 6:46:50 PM PST by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 25 | View Replies]

To: politicket
Look at the Fed's latest monthly H.4.1 report and let me know if you still think the same.

They hold bonds. They always hold bonds. When rates are falling and when they're rising. And?

40 posted on 01/13/2022 6:48:51 PM PST by Toddsterpatriot (TANSTAAFL)
[ Post Reply | Private Reply | To 27 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-8081-90 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson