Posted on 01/17/2022 8:11:41 AM PST by millenial4freedom
YES, gradually 1/4 TO 1/2 a point every quarter or so
Zugzwang
yes...and more than once
We're far from bankrupt - since our entire monetary system is based on debt (the promise of future labor of ourselves and others). Future labor promises can be made forever, and in any amount - doesn't mean they'll be fulfilled - just that we're promising the future labor of our kids, grandkids, great-grandkids, great-great-grandkids...you get the idea.
“No, this cannot be done.”
It’s already been done. The Bond Market calls the shots, the FED has no choice but to follow. Go look at what the 10 yr Bond rate has done over the last 6 months.
That’s the rate that mortgage lenders set their rates from. They mark up the 10yr rate about 1.5% and that’s your mortgage rate. It adjusts daily with the 10yr rate. The FED only changes the overnight interest rate for banks. The FED will tighten and the country will survive. The coming adjustment is nothing compared to the early 80’s.
People have been programmed with BS fear porn about everything in our lives, reality is a lost concept.
Yep. The house is out of money and it’s time to pay the piper. Interest rates have to rise to get Bidenflation under control.
Yes, inflation is perceived as a more serious problem than a stock market correction, which will happen eventually anyway.
Not true. The asset bubble created by investors taking out bank debt and putting it immediately into equities would go away if rates get too high.
That would cause a major downswing in stocks, and many companies would be hurt.
... and sooner than expected. Our bank economist is projecting at least 4 interest rate hikes in 2022 with a possibility of a fifth.
Our economy is about to go into the crapper. Higher interest rates are coming, time to shift assets from equities in the stock market to protect yourselves financially.
“The asset bubble created by investors taking out bank debt and putting it immediately into equities would go away if rates get too high.”
I am not aware of that. I know the cash holdings is more than $12T and that has fed investment but investors have few places to put cash for investing.
This would be correct 30 years ago, but that’s not how the debt works anymore. The government borrows from itself, so federal borrowing has no need to reflect market rates.
Not yet...but it's coming.
“But Biden will limp along with no solution at all, and the Fall elections (if at all honest) will devastate the Democrats.”
And then they’ll blame the Republicans for it all.
(Another variation of keynes’ “In the long run we are all dead”)
The Fed really has no choice, the inflation is out of control. They have to raise rates.
The problem is government spending at this point. The Government has to stop increasing the debt. The only way to do that is to control Welfare at this point, because it’s half of the economy or more. Democrats can’t control the debt or welfare spending, because then they can’t ‘fulfill the promises’ to the people that got them into office.
We seem to be running out of other peoples money quickly.
I think Biden recently pushed a $4T spending bill that didn’t cost anything at all.
That’s a game that doesn’t go on forever. Debt works the way debt works.
Yes, but not enough. They should have long ago. It will be very painful when they really raise rates when it is too late. The real problem is not being addressed and I am unsure interest rate changes will help much. There is a structural spending problem that is much worse than any other time in our history. This is not the same problem we had in the 70’s and early 80’s.
I wants them 6-8% shopping CD rates to come back in full glory......
I’ve been watching Steven Van Metre videos on Youtube.
He’s been making an interesting case that since the money for the stimulus was borrowed both domestically and from overseas dollar reserves, that it wasn’t really money printing. And that now that fiscal stimulus has ended, that things will go back to normal, and the inflation will reverse.
Kathie Wood also has been saying we will see deflation instead of inflation.
You raise an excellent point though: for those in their thirties and forties, now's not the time to panic. Those in their mid to late fifties and early sixties may want to reduce risk very soon.
If I were in my thirties or forties, I'd be piling up cash to buy into the market on the correction. That's what I used to do and that's why I'm in the position I'm in for retirement at 60. :-)
We’re far from bankrupt - since our entire monetary system is based on debt
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