The fed has no way of ascertaining it will be “transitory”.
It’s only partially in their hands.
That said, it is certainly time to raise the discount rate by a point or better, with an eye toward 3 points this year.
And all asset purchases by the fed must end today.
But none of that will happen. They’ll keep pumping until the balloon pops. They’re already committed to that course for the long haul.
They were committed to it at least 20 years ago.
And when the balloon does pop it could send us into another Dark Ages, as when the Roman Empire failed.
when the balloon does pop it could send us into another Dark Ages, as when the Roman Empire failed.
I thought that was the whole idea.
Anyway, they keep telling us that climate change is a
bigger threat and we need to make drastic changes to
our whole life but they won’t do anything about exploding
the economy.
“And when the balloon does pop it could send us into another Dark Ages, as when the Roman Empire failed.”
But if it doesn’t, and we survive, our otherwise unsolveable debt crisis will be solved! That’s essentially the long odds bet they are making.
And if the bet pays off, just like any degenerate gambler, they’ll go right back to printing money and spending beyond our means.
I think that all of us naysayers were wrong about that whole “just like the fall of Rome” thing.
But I only think we were wrong about the timing. It can and probably will get that bad. The only question is, when will it happen.
There was an economist that was normally very good about his predictions that finally admitted, about six years ago, when asked why his predictions about the next collapse were so wrong, he shrugged his shoulders and said, “I honestly had no idea just how far down the road they could keep kicking the can.” But the lockdowns may have drastically compressed that timeline.
Fact is, these people can only control it for as long as they can control it, then it’s every man (and country) for himself. And I think that will happen sooner rather than later. The whole system survives on faith. The loss of faith in our electoral process is part of that, but only a part. It could be called the canary in the coal mine.
And rigger mortis has set in.
They’re trapped. Raising interest rates means paying more for new national debt. I read that a half point jump would increase their interest payments by many billions.
>>...time to raise the discount rate by a point or better, with an eye toward 3 points this year.<<
The other side of the coin. Slowing down the housing market and increasing the service load on the national debt.
I think the feds are between a rock and a hard place.