...huh? If you want to lower inflation you'd typically raise interest rates...
(These sorts of stupid-simple mistakes are pretty typical from inflation fearmongers in threads like this one... a lot of words that make it sounds like they know what they're talking about but sprinkled with incredible tells like this one.)
> in a low-gravity environment, everything becomes much heavier to lift
> brb hold my cryptobags
The smart mmoney is on rates staying low for a long time which shows you just how powerless the Fed is right now.
They would LOVE to raise rates. They can't.
lol? whut? Stop talking about government debt, it's a stupid talking point used to beat people over the head with who want to govern by misleading voters into believing that government debt is the same as household debt.
Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. The only thing that is currently "weak" in the US economy is our JIT supply lines, and that will work itself out eventually.
Agree with this take. The GDPNow estimate for Q4 growth is 8.5%. A lot of this seems to be getting lost in the politically obsessed back-and-forth.
> Stop talking about government debt, it's a stupid talking point
Said not a single respectable person in economics or finance ever.
There's no real alternative to stuffing money into Treasuries, so it's kind of a moot point right now.
That usually happens in the beginning stages of high inflation scenario.
Also government debt is not the same as household debt, however it still matters especially at these high levels. There is a breaking point just no one knows where it is. 300% gdp? 500%? 700%. At some point it will break down.
The only two things that can actually make the system collapse in the next 30 years are:
- a communist revolution in the US (this is not happening anytime soon, do not worry).
- zealots with a debt fixation, who would rather collapse the entire economy because they think debt is immoral. This one is a little bit more likely, but given the strong ties between the financial sector and the political parties in the US, I really doubt these people would ever be in charge. Republican, when they don't control the White house, are prone to rant about how debt is unsustainable and should be reduced at all cost, but whenever there is a Republican president, the debt keeps rising.
Also, there is exactly zero historical instance of hyperinflation caused by public debt labelled in a country's own currency. Zero.
There's little rational reasons to believe public debt will cause hyperinflation, and as I mentioned above there are in fact powerful effect acting in the opposite direction.
The only reason people make the link between those two is that hyperinflation is the canonical example of an economic catastrophe and because people believe debt to be immoral, it must lead to a catastrophe in the end. This is a religious/moral discourse, which has no link with the actual world.
And to conclude, keep in mind that high level of public debt is a political decision (borrow from the wealthy instead of taxing them) it would be quite straightforward to fix (with the 60s income tax level) but it's in the interest of no-one with a bit of political power.
For the record: most of inflation comes from rising costs in the supply chain (from supply issues, resources scarcity and/or wage raises). This is where we are now.
There exists instances of hyperinflation related to debt (Weimar republic's for instance) but this was due to debt labelled in a foreign currency (basically gold in this case).
Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%?
Also Powell isn't Volker by a long shot. I don't recall the Volker pivot because a few traders weren't having a good day.
You realize that this figure was only calculated a few days ago, right? What reaction time do you expect?
the reason you should be concerned about these prices in relation to their 2008 crisis prices is because the countermeasure that resulted in 2008 relief --Quantitative Easing-- cannot be used again because we effectively never quit using it to prop up the last decade of commercial market performance.
https://en.wikipedia.org/wiki/Quantitative_easing#US_QE4
the Federal reserve also has no leverage to modify the prime interest rate to combat this inflation, as it already sits near-zero and the fed funds rate has been agreed to stay at under a quarter of a percent. modifying any interest rates in 2021 would blow up the corporate credit bubble, so the fed is mostly just bloviating about "transient inflation" to no ones real entertainment.
https://en.wikipedia.org/wiki/Corporate_debt_bubble
finally, the bond buyback taper the Federal reserve has been touting since July 2021 but too terrified to implement is effectively meaningless as its not set to end until next July at the earliest, effectively allowing uncorrected inflation to continue another eight months. the fed hasnt announced any further countermeasures after this...they just assume a bond taper will coincide with the purported end of covid and surge of consumer confidence which never manifested in 2021. Instead the supply chain continued to fail and vaccine targets were never met.
Id conject the level of wishful thinking driving fed policy at this point should be enough to tenure Powells resignation sometime in March. the only thing combatting stagflation at this point is corporations like Amazon who know if they dont do something about real wages in the absence of effective federal policy it will start to reflect on their earnings reports, and even they seem recalcitrant to take any real steps unless the union comes a knockin.'