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Posted on 11/12/2025 12:50:29 PM PST by millenial4freedom
Joe Lavorgna, counselor to Treasury Secretary Bessent, joins 'The Exchange' to discuss the state of the government shutdown, what a reopened government will do to the economy and much more.
(Excerpt) Read more at youtube.com ...
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Click here: to donate by Credit Card Or here: to donate by PayPal Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794 Thank you very much and God bless you. |
Interest rates are too low, given the current Inflation Rate.
Trump and his circle seem adamant that that isn’t true...or they’re worried about the labor market.
Trump needs to juice the Economy for 2026 and a big part of reducing the Debt is through Inflation.
Trump is in favor of moderate Inflation through the end of his term and wants to greatly reduce the interest the Fed Gov’t is currently paying on the Debt.
I agree with that.
Even if I didn’t, I think the Fed is always too slow in either direction. They were 6-8-12 months too slow to hike rates in 2021. I don’t give them a pass for that, but every other western/free market central bank also went too slow. The US peaked - and recovered - earlier, but it was a global “everyone was too slow; the US was just too slow *first*”.
I say this despite being an investor who knows there’s a bubble pop coming and has little plan than to ride it out, but the Fed needs to be cautious and hold onto the slack.
Better to be slow in both directions, than inconsistent.
Actually, loose printing-press money has inflated house prices while the 30 year mortgage interest rates today are NOT high by historical averages.
People, even finance people have too much short term memory when it comes to money matters.
From 1971 to today the overall average 30 year mortgage interest rate is about 7.7% - which is HIGHER than it is today. (I downloaded the data from the attached link and took an average for the 2800+ weekly rates since 1971).
Mortgage payment rates are too high because housing prices are inflated with federal reserve printing press money the past twenty years, NOT because mortgage interest rates are out of wack.
https://fred.stlouisfed.org/series/MORTGAGE30US#
“an investor who knows there’s a bubble pop coming and has little plan than to ride it out”
Riding it out is usually the best plan for a long term investor. So you have a plan. :-)
It was a pittance, but a new pittance. I opened my first investment account just before ‘Black Monday’ in 1987, like 2 weeks before. Still, in the late 80s? For just-married me in my 20s? ~a thousand bucks becomes $500 in a poof. I thought I just got conned.
Dot com bubble, 9/11, 2008, Covid.
I’m obviously older now and well-hedged, but I’m a firm believer in the idea that any dollar in the market is one I neither need nor want in the next ~5 years.
Especially now with such cheap options on index-based ETFs? No-brainer.
My first mortgage was 8 1/2% and a second was 10%
“a thousand bucks becomes $500 in a poof. I thought I just got conned.”
Yeah I remember 1987 as well. I didn’t believe I was conned as I knew what the stock market was all about and the risks. But in 1987 that lesson became less academic and more personal. :-)
Long ago I settled on long term index investing. Invest, diversify, leave it alone and allow it to grow. One technique that worked well for me was to increase one’s investment % each year. Put a healthy chunk of annual raises into investments.
I know you know all this but posting it in case there are some 20 somethings out there that might benefit from what I learned the hard way.
Decades later I am retired and am grateful for everything God has given me to steward.
The Fed have TDS.
wood for house ~= $11,000 total [~$3,000 from tariffs I believe]
Park Slope, Brooklyn Heights, Fort Greene, Upper East Side, Upper West Side
~3,240,000 square feet of brown stone
~$25 million, total
It’s not Trump’s fault that people buying houses don’t know proper prices to offer. Too many people have too much money from the stock market.
3% rates are for charlatan investment bankers that cover the spread of a fake business using press releases to attract stock investors to cover the spread. If you can't make a profit in your business, stop asking for free money.
If you make a widget or provide business services and can't survive on 5% terms of borrowed capital, you need to close your doors.
10% mortgages would drop housing values by 40%. But that would drop municipality tax revenues by 40%.
Stupid folks we are.
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