[Retain Mike]

Below is the best short article (only seems long) I have read explaining inflation in this country. I found it especially interesting, because I picked up an MBA in Finance to start my civilian career after the Navy.

From what I read here inflation should not go away in just a few months after printing so much money and the fed buying the bonds. We could be in for some rough times, so police up that gear adrift and stand by for heavy rolls.

Inflation in the United States

https://imprimis.hillsdale.edu/inflation-united-states/

[ConservativeInPA]

That’s a good article. I’ve already read it. Hillsdale College is a gem. It’s a great service that they provide America, and the world for that matter. Unfortunately there are few schools like Hillsdale.

We are cruising for some very difficult economic times as a nation. I firmly believe that the Fed did not raise interest rates today because it would cause more bank failures. Simple economics tells us that increased interest rates devalue assets. Work out the charts in your head.

In simple layman’s terms: Banks purchase bonds with depositors cash to generate income that has a higher return than cash holdings or the interest earned from lending. When interest rates increase, bond values decrease. When depositors want their money and banks do not have the cash because it is tied up in other investments, they sell some of their bond holdings and forgo the interest income from the bond. This works fine unless bond values substantially decrease. In the case of SVB, First Republic and Signature, the bonds they held lost over 40% of their value.

There are still many banks teetering on insolvency exactly for this reason.