Today Zerohedge is featuring post after post maintaining that the Fed can’t rein in inflation, will fail, will in fact fall on its face in the attempt. Many of these posts are written in openly sarcastic terms. For our purposes, I want to focus on one:
WTH!!! I cannot believe the visual imagery used during Biden’s speech. Blood red lighting, Marines behind him. Tucker is correct in his statement that Crazy Joe has crossed over into dangerous territory.
If the Republicans don’t get off their collective asses after this speech, we are finished as a nation.
Open sarcasm @ ZeroHedge . . . what's not to like!
Too bad the Fed failed miserably at its supposed reason for being, that is maintaining the value of the United States Dollar, which has the purchasing power that 2 cents had a century ago. I was very annoyed by Trump when he bad mouthed the Fed for raising interest rates in 2018. Uncounted $ trillions of interest on deposit accounts lost because of the stupid zero interest policies, robbery by bankers/politicians.
Lastly, Josef R. Satan has completely gone off the deep end, pity the poor Marines that were assigned to flank the Idiot in Chief . Divine intervention would be welcome!
The Zerohedge author makes some good points. But... the Fed is just stating a fact about Fiscal spending. If the Congress keeps spending money it has not already raised in Taxes like there is no tomorrow, and if existing debt can no longer be rolled over to future debt, and if foreign buyers of Treasuries are nowhere to be found (as they generally haven't been for the last 8 years), forcing the Fed to print up more and more Dollars out of nowhere... and using them to buy Treasury securities themselves... sure this will contribute to inflation. But that is a rather simplistic view. Inflation depends more on HOW MUCH of that newly printed money finds its way into the general money supply and how much of it contributes to efficient new investment in the economy and returns thereof as opposed to meeting existing liabilities (such as Social Security and Medicare). Plus, now the Fed is tightening.
To the author's point here is an informative chart showing the relative impacts on inflation between demand, supply, energy, and governmental monetary policy:
While simplistic, it does show that whatever the Fed does against inflation will not by itself be sufficient to tame it. The first comment under this chart makes a good point: We have had structural changes in how the "demand" side is fulfilled and must now be assessed - both supply chain changes and problems, and Energy provision problems. Globalism is receding. Supply chains will no longer be as efficient. A recession is either already here or coming. Tax revenue will be decreasing. These are known factors that the Fed cannot by itself address and no one else (like Congress?) seems to be addressing. The fundamental point of the chart I linked remains. Could it be that the Fed is concerned about other factors being addressed that are needed for THEM to maintain their effectiveness and power? Big shocker there.
ZeroHedge tends toward sensational reporting and opinions, making everything out to be potentially worse than it actually is. The government DOES need to have some inflation (just as a matter of continuing operations - it gives them liquidity). Sure we have had an economy and a stock market based on printing of new money and leveraging of money from other countries for the last 15 years. That surely is not good but that doesn't mean the S&P 500 is going back to what it was then. There has been a lot of productivity and growth and profits in the interim and these need to be accounted for also in any reassessment of proper asset valuation. The nominal and the real are not linearly correspondent and are both subject to a multitude of factors over time.
Another thing to keep in mind is that the Fed cannot fix the energy problem, the primary driver of inflation. Gasoline is dropping in price due to decreased demand while the policy makers in the administration refuse to increase supply. Energy supply increase is the best way to tame inflation since demand will only drop so far. Fix that and inflation should decrease to manageable levels.
We definitely need to stop the spending, but that is a voter question.
When the downward move resumes in earnest, positions in assets with real value (gold, commodities, etc.) often get sold off to raise funds to meet margin calls. You may want to tread carefully. If equities get really bad, they could drag all other asset classes down with them. Every one of the equities markets bear rally has now failed and rolled over for three weeks. Will they break the June lows? That would be my bet, but I'm in cash and don't have a dog anymore.
By getting CDs or annuities you can cut 2-3.5% off the inflation hit (depending on term) - FWIW. The downside of course is having to tie up your money. Lots of people are waiting to see how high rates go before committing.
WTH!!! I cannot believe the visual imagery used during Biden’s speech. Blood red lighting, Marines behind him. Tucker is correct in his statement that Crazy Joe has crossed over into dangerous territory.
If the Republicans don’t get off their collective asses after this speech, we are finished as a nation.
I’m still reeling after seeing this disgrace.
Open sarcasm @ ZeroHedge . . . what's not to like!
Too bad the Fed failed miserably at its supposed reason for being, that is maintaining the value of the United States Dollar, which has the purchasing power that 2 cents had a century ago. I was very annoyed by Trump when he bad mouthed the Fed for raising interest rates in 2018. Uncounted $ trillions of interest on deposit accounts lost because of the stupid zero interest policies, robbery by bankers/politicians.
Lastly, Josef R. Satan has completely gone off the deep end, pity the poor Marines that were assigned to flank the Idiot in Chief . Divine intervention would be welcome!
truly bizarre:
https://twitter.com/BrandonStraka/status/1565510486619295746
https://twitter.com/AmyKremer/status/1565513025808916480?cxt=HHwWgICzqa7z6LkrAAAA
Yep - just beat me to it :(
Good summary:
https://redstate.com/bonchie/2022/09/01/joe-biden-crosses-lines-in-grotesque-national-address-heckler-spoils-his-party-n621397
Disgusting but sadly not surprising.
https://youtu.be/isLNLpxpndA?t=83
The Zerohedge author makes some good points. But... the Fed is just stating a fact about Fiscal spending. If the Congress keeps spending money it has not already raised in Taxes like there is no tomorrow, and if existing debt can no longer be rolled over to future debt, and if foreign buyers of Treasuries are nowhere to be found (as they generally haven't been for the last 8 years), forcing the Fed to print up more and more Dollars out of nowhere... and using them to buy Treasury securities themselves... sure this will contribute to inflation. But that is a rather simplistic view. Inflation depends more on HOW MUCH of that newly printed money finds its way into the general money supply and how much of it contributes to efficient new investment in the economy and returns thereof as opposed to meeting existing liabilities (such as Social Security and Medicare). Plus, now the Fed is tightening.
To the author's point here is an informative chart showing the relative impacts on inflation between demand, supply, energy, and governmental monetary policy:
https://twitter.com/PatrickKrizan/status/1565246291558400000?cxt=HHwWgICwpbHN77grAAAA
While simplistic, it does show that whatever the Fed does against inflation will not by itself be sufficient to tame it. The first comment under this chart makes a good point: We have had structural changes in how the "demand" side is fulfilled and must now be assessed - both supply chain changes and problems, and Energy provision problems. Globalism is receding. Supply chains will no longer be as efficient. A recession is either already here or coming. Tax revenue will be decreasing. These are known factors that the Fed cannot by itself address and no one else (like Congress?) seems to be addressing. The fundamental point of the chart I linked remains. Could it be that the Fed is concerned about other factors being addressed that are needed for THEM to maintain their effectiveness and power? Big shocker there.
ZeroHedge tends toward sensational reporting and opinions, making everything out to be potentially worse than it actually is. The government DOES need to have some inflation (just as a matter of continuing operations - it gives them liquidity). Sure we have had an economy and a stock market based on printing of new money and leveraging of money from other countries for the last 15 years. That surely is not good but that doesn't mean the S&P 500 is going back to what it was then. There has been a lot of productivity and growth and profits in the interim and these need to be accounted for also in any reassessment of proper asset valuation. The nominal and the real are not linearly correspondent and are both subject to a multitude of factors over time.
I’m thinking about calling my Congressman and asking him if he understands what it means to “reap the whirlwind”.
Probably just be dismissed as some religious wacko. Oh, well.
"A threat to our democracy"
Me? Naw, I’m just a simple farmer from Kansas😁
Another thing to keep in mind is that the Fed cannot fix the energy problem, the primary driver of inflation. Gasoline is dropping in price due to decreased demand while the policy makers in the administration refuse to increase supply. Energy supply increase is the best way to tame inflation since demand will only drop so far. Fix that and inflation should decrease to manageable levels.
We definitely need to stop the spending, but that is a voter question.
So, my money needs to come out of the market and into gold, etc right damn quick.
When the downward move resumes in earnest, positions in assets with real value (gold, commodities, etc.) often get sold off to raise funds to meet margin calls. You may want to tread carefully. If equities get really bad, they could drag all other asset classes down with them. Every one of the equities markets bear rally has now failed and rolled over for three weeks. Will they break the June lows? That would be my bet, but I'm in cash and don't have a dog anymore.
Plus Gold (normally good in stagflation) is fighting a very strong Dollar.
By getting CDs or annuities you can cut 2-3.5% off the inflation hit (depending on term) - FWIW. The downside of course is having to tie up your money. Lots of people are waiting to see how high rates go before committing.
Hey! I just got 3.48% on some one year T-Bills. Waiting for 6.5% later this year... ;-)
Yes sir. I do have a financial advisor and notice he’s been moving more into cash lately. May call him and tell him to go faster 🤣
Trump is just as guilty. He signed CARES.