One horrible effect of this massive deficit fiscal policy is that the Fed has to keep interest rates high. It’s the only tool they have to stem the price rises caused by currency inflation. But this action discourages private sector investment, i.e. development of new tools for increasing productivity. And increased productivity is in the long run the only thing that can balance out inflation.
On this rate staying up....I totally agree. This low-mentality that has been around years was wrong.
But you go to the home market and say x-home is worth $650,000 (in your mind) and look for buyers who have 30-percent for a down payment...then find few if any can thrill the banks with the requirements or the job security.
You can predict for the next decade....it’s a long tough period and very similar to the 1930s. College paths? That will decline in a hurry. Both parents now having to work, to afford any lifestyle? Yeah. People charmed to over-pay on some I-Phone? Forget it. Spending $5,000 on some Aruba two-week vacation? Not for the next couple of years. Motorcycles or speed-boats? That’s going to decrease. People buying bare-bones health insurance? Will start to be the ‘norm’.
We will end up whittling down expenses...as our chief way of fighting inflation, and grumble about it daily.