Posted on 08/20/2023 8:24:19 AM PDT by Kaiser8408a
What is the difference between a porcupine and the KC Fed Jackson Hole conference? At the annual Jackson Hole Federal Reserve retreat, the pricks are on the inside! (Source: Clive Owen from “Shoot ‘Em Up” about drivers of BMW cars).
Yes, the elites of The Federal Reserve System will gather at Grand Teton National Park in Wyoming to discuss “Structural Shifts in the Global Economy,” and will be held on Aug. 24-26.
Here is where we sit on Sunday. The 30-year conforming mortgage rate (blue-green line) is over 7% and up 154% under Biden. The Fed’s target rate is now 5.50% (dark blue line) and The Fed still has over $8 trillion on their balance sheet (red line).
Here is a Message From Michael (Snyder). No, not Dionne Warwick’s Message TO Michael.
Do you remember what happened in 2008? Many people believe that another historic financial disaster is coming and that it will absolutely devastate the U.S. economy. Earlier this week, I wrote about an investor named Michael Burry that has actually bet 1.6 billion dollars that the stock market is going to crash. He made all the right moves in 2008, and he fully intends to be proven right once again in 2023. Of course current conditions definitely resemble 2008 in so many ways. The residential housing market is so dead right now, and commercial real estate prices are plummeting at a very frightening pace. Unfortunately, officials at the Federal Reserve are making it quite clear that they are not done strangling the economy.
This week, mortgage rates jumped above the 7 percent mark to the highest level that we have seen in more than 20 years…
Mortgage rates surpassed 7% this week, hitting the highest level in more than two decades.
(Excerpt) Read more at confoundedinterest.net ...
Jackson, Wyoming is the a New York style high rent exclusive hangout for the rich and mega-rich. The ordinary people that work in Jackson have to live across the mountain in Idaho because of real estate prices near Jackson Hole.
to the highest level that we have seen in more than 20 years…
The Magic Mortgage Rate Number to Tip the Housing Market
2% is too high.
“The ordinary people that work in Jackson have to live across the mountain in Idaho because of real estate prices near Jackson Hole.”
That is a brutal long commute especially during bad winter weather—great views from the top of the mountain though...
;-)
Ever since the dot com crash in 2000 and the 9/11 attack the Fed has largely kept rates artificially low. It was allowed to rise a little around 2005 but then was slammed back down in 2008. I don’t think anyone would recognize a natural interest rate anymore.
Supply and Demand 101. Americans saved money, had low credit card balances coming out of quarantine. They are spending those savings on the same goods and services because inflation has made them more expensive.
Enter Biden in Jan 2021 and do things guaranteed to cause inflation. That was the cause of inflation.
The FED is required by law to counteract the actions of Biden. The FED is just doing its job required by law.
Bidenomics is the problem. T
I’ve seen an economist (sorry, I forgot who) who said that the natural rate of inflation is slightly negative to match the average increase in productivity so that an hour of labor stays the same price for a certain job over time. Anything higher is from governments and banks skimming from devaluing currency.
I can sorta see perhaps why the gov’t wants an average slightly above zer0 in addition to why a gov’t deeply in debt likes hidden taxation.
That would be that as there is natural variability in the inflation rate, going below zer0 might send the economy to a place not desired by the majority of the oligarchy.
Having to develop financial strategeries that can weather both deflation and inflation could be more complex and problematic.
“Having to develop financial strategeries that can weather both deflation and inflation could be more complex and problematic.”
Ludwig Von Mises wrote about this topic at length—and proved it was absolutely impossible for central planners to achieve this.
The problem is not just creating a model good enough to model economies—it is that humans (what von Mises called “Human Action”) is a highly complex mix of both rational and irrational decisions. There is no way to create a computer model to accurately deal with that.
The other issue with “mixed economies” is that humans will work the system or work around the system in an infinite numbers of ways—most of which will never be understood by pushing around statistics.
Example—how can you budget for Medicaid and Medicare when many thousands of actors out there are figuring out new ways to steal from the programs?
Easy cash made the costs of houses go up, and that made the property taxes go up. Everything’s getting harder.
They should make a lot of money to make the commute worth it.
They're doing their job but the cost of living is now higher. Even if inflation is now 0%, we can't go back to the prices they were three years ago.
The author doesn't understand options or 13f filings.
The point is that it is the Biden policies that caused this.
Jan 2021 Biden took several separate actions, each of which raised the cost and prices of fossil fuel.
Then Biden flooded the economy with Recovery Act money that recovered nothing but greatly increased the cost of doing business.
Then the Inflation Reduction Act was not about inflation, but about spreading money to buy off some supporters.
No economist is their right mind approved of this. Keneysians favor the government spending money in only certain conditions. This was not one of them. And of course Austrian and Friedman and other economists don’t spread government money like that.
It is factually wrong...and politically a loser .... to take the focus off Biden.
At this point (way late) unless you want runaway inflation, higher rates are a must....there’s no best choice, no easy solution.
The USA & the world have spent us into this situation. Now the party’s over and we get the pain.
It’s election season…..Powell has his marching orders not to raise rates, but to start cutting.
“just to hit ‘average’.”
I remember 1980-81......
all these whiny little twits who complain about 7%
need to look at some history.
We are still behind the curve, just pushing inflation forward.
We should be at 10% ... and if the fed is not carefull an backs off to soon... well ... happy days are here again(1980)
WIN...
“not to raise rates, but to start cutting.”
hmmmmm ... is it that simple?
Do his Voters feel the effect of high interest rates?
OR do they feel the effect of high inflation more?
Yes rich leftys feel interest rates .... but I think they understand that they need the mobs to pull the cart right now.
When you get your money for free, you don’t care why.
But if that gas and cigs and 40 eats in to the crack budget ... it ticks you off.
High intrest rates are a blessing because, like a decrpit prostitute, they are not seductive.
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