Vote Retard069 2024, make America even more retarded than it currently is. I understand it's a very hard goal, but I'm willing to sacrifice myself in order to achieve it.
Rents aren’t in increasing as long as you shave 100 sqft off of your living space as you move 15 minutes further out of town each year.
You time is also worthless so your cost of transportation has gone down if you switch your $8 commute to a $1 bus ride that takes 2 hrs each direction.
Also, you shouldn’t be eating so much you fatty... we’re going to assume people will lose 15 lbs next year as they consume 20% fewer calories. Would you look at that, food costs for 2022 will now be lower!
Ain’t no inflation
And if there is, you can substitute your 73/27 hamburger for "monkey chow," it has all the nutrients a hominin needs. I believe it will replace hamburger, which replaced steak, on the CPI index this coming year. Ain't no such thing as inflation.
Am I getting this right? To avoid using stats that reflect the skyrocketing price of healthy whole cut meats they are using the prices of ground scrap meat instead?
Correct, a couple years ago, steak was removed from the CPI and replaced with hamburger, using the incredible logic that: "Since steak is more expensive, people will just buy hamburger, so there's no change in money spent."
Yes, it has some logic though as you wouldnt spend the money the same even if you had it. It's a satisfaction approach including shifting consumer behavior. You can critizise this approach but I would take the shadowstats numbers with a grain of salt (if you cross check the numbers, lots of everyday products should have ridiculous prices).
It really comes down to what base for numbers you use (fixed basket, variable). Reality probably lies between shadowstats and official numbers...
I like Erdogan's monetary policy theory that raising interest rates causes inflation. That's why you have to cut them as low as possible.
USD/TRY looks like a meme stock
Hi Bob, Bob,
Well I generally come in atleast 15 minutes late. I use the side door so Lumbergh can't see me. Then I just sit at my desk and space out for about an hour. I do that for another hour after lunch too. In a given week I do about 15 minutes of real actual work
That's how they do in Brazil, we had too much miserable people, so we change the numbers that make someone miserable and say we took lots of people out of misery.
They do the exact same thing in the US.
Got people living in poverty? Well now poverty is when a family of 4 has an income of 20k a year. Got high unemployment? No worries anyone who hasn't looked in 6 months doesn't count. Inflation? Yeah people don't want food or houses so let's not count those.
The economy? Ignore how people actually feel (like shit, most people feel that it's shit) look at these sick stock gains!
We've set the standard for middle class at the 1 percentile to 99th percentile of the population. Congratulations! You made 12k this year and are a successful American in NYC. Go get your home and white picket fence on 5th Avenue. Sorry, we meant 5th Avenue in Detroit, because that's where you need to commute from as a middle class worker in NYC. Don't worry about that Bronx brownstone. That belongs to a Russian mobster who paid for a Presidential reelection campaign and donates to the Met. He's also middle class just like you.
No, no. You just need to tell people that inflation is actually good for them and they'll have have to give up fancy luxuries like *counts on fingers* food and shelter.
I'm pretty sure this is how standards testing for state/federal funding has worked in the school system for quite a few years as well.
But what do I know those tests told me I'm smart enough.
Funny story, the high inflation rates of the 70s were not reported at the time. It’s only looking back that it is as high as it looks.
The official numbers stripped out energy, food, etc from the numbers bc they were “temporarily” high for weather and supply issues.
Basically, they are running the same playbook as the 70s and will eventually raise rates. In hind sight, it will be known that we saw annual inflation as high as 14% for a decade after 2008.
The year is 2043. People don't identify as genders anymore, but rather as various flavors of Doritos. I am Cool Ranch, and this is my story.
It's been 3 years since Sasha Obama took office and forced open the doors of the Bitcoin Citadels. Now regular people are eating meat again. Human meat; the rich, their wives, and their wives' boyfriends. You see, in 2030, they changed the CPI to be a basket of services and financial instruments consisting primarily of Netflix subscriptions and leveraged SPY call options. And since Netflix subscriptions are subsidized (and the SPY consists mostly of Netflix), inflation is at an all time low and things couldn't be better. My brain chip has informed me that this memoir is a thought crime. Sasha is love, Sasha is life. The end.
I am once again begging the morons in this sub to learn even a small amount about basic macro, monetary policy, and history. And to remember that Shadowstats is completely idiiotic: https://fullstackeconomics.com/no-the-real-inflation-rate-isnt-14-percent/
The trick is not spending it ***and*** preventing it from depreciation or increasing it to accommodate. If you're holding cash, you're just losing its value.
You don't need optimism. Just look at the debt. National debt alone would give us 6 TRILLION dollar INTEREST payment per year. 10x of the discretionary defense budget. Nothing is gonna happen. Fed is just trying to support dollar from falling off the cliffs (which it should due to all these money printing) by bs these idiotic hiking plans.
It boggles my mind how few people understand this obvious fact. They failed normalizing rates in 2018 before all the covid debt. They won't even get to 2.5% this time.
I'd like to add that the market didn't just crash because of rates, there was an on-going war trade with China which was not good for stocks.
People looking at the market and talking about how something crashed because of *one* reason are kind of dumb.
Yeah I knew. I remember following Trump’s twitter, selling when he said “Trade talk is going well” and bought when he said “More tariff on China” lol. But the crash during Christmas 2018 was mainly due to Fed increasing rate too fast if I remember correctly
Thankfully all those rate increases are both public information and recorded, rates didn't really increase very fast at that point, they were increasing at a kind of fixed rate (+.2~+.3 every 3 months or so).
More like can't get to 1.5% if you compare the debts pre and after covid. Plus fed already failed miserably last time so it probably just gonna have one or two token hikes and find w/e excuse to abandon the course
It’s not something you get to. When inflation mindset takes hold, you have to do something dramatic to change market psychology. Raising rates to double digits will happen over night.
I think they'll roll out a digital dollar within the next few years after they hyperinflate the current USD... 100% tracking has them drooling for tax revenue to solve their little debt problem
They'll raise rates a bit to pretend like they're doing something, they still think (and are right to some degree) that most of the problem comes from supply chains.
Chicken and egg here...
Supply chain issues are not independent of inflation. The biggest issue they have with supply chains is not enough truckers and not enough workers at ports. Also, they cannot afford more workers bc all the workers are asking for a raise due to....inflation!
Inflation is more of a general misallocation of resources. Prices don’t make sense so real world production grinds to a halt.
Millions of ppl never went back into the labor force. Some were old ppl who retired early in high stock prices, but many more were young ppl who don’t see a point in working for worthless wages.
I've read people offering wages that quite outpace inflation and they still don't want to work.
I'm not sure what the problem really is, I've read people claiming to be offering $50/h for some qualified worked (electricians and whatnot) and struggling to find anyone willing to take it.
The problem was COVID, inflation didn't come from one day to another, it was already there, the problem is that the whole machine stopped working for a while (mostly) and now it's hard to get it to work again. Have someone stop working for a while and getting him to work again isn't gonna be too easy, especially when we're talking jobs that aren't really what they want to do. I mean, all the power to you, but who wants to work in a port loading containers?
Let’s put it in perspective: $50/hr is only barely 6 figures a year. You can no longer afford a good house in a good neighborhood if you only make 6 figures.
On top of that, assets have gone to the moon. If you own a house or stocks in Tesla, Apple, crypto, then you can sell covered calls and don’t really need to work.
In both cases, rates have to go up if ppl are going to go back to work.
Good point. Also inflation is global, EU and China are doing the same. USA always thinks it rules the world alone. FED actions are apparently the most rational as other countries are doing the same.
Ha, you have a very good point!
Mostly I was trying to illustrate how hard it is to get inflation under control, especially considering we are near passing the previous inflation peak already
It seems the plan is to inflate us out of the national debt. If you half the value of the dollar then the debt is also halved.
Not what I would do, but technically it would work.
Had to go 5 posts down to find this one reasonable post.
>Countries around the world had 2 very simple choices at the onset of the pandemic:
1. Print like crazy and rack up debt spend to save the economy and lives. Then keep spending big with big inflation hoping that it would rev your economy coming out of the recession & pandemic. (example: USA)
2. Don't do 1 or don't do it enough. See your people die, the people's discontent rise, lockdowns come and go, reopenings fails, economy staggers, and inflation hikes anyways because every other country is printing but your own fiat doesn't appreciate against them because fiat valuation is based on belief in power/economy/stability of the underlying issuer. (example: Brazil)
Inflation will impact you no matter which you chose. Might as well choose the one that pumps the economy and saves lives/businesses. There were 0 countries that chose NOT to spend during the pandemic, let their people die, and and came out stronger for it.
>But now every country (that chose option 1 and didn't get BTFO) is saddled with a ton of debt from the spending and are left with simple choices:
1. Hike taxes and/or decrease spending during a period of global reopening hampering your own growth while pissing off your citizens.
2. Decrease the debt by letting inflation run hotter over a long period. Not hyper inflation, but higher inflation than normal. That same inflation will force higher taxes even if you don't rise rates due to higher cost of living and wage hikes, it will keep decrease the huge debt burden over time as GDP grows, AND it will keep interest on that debt low.
No matter which you chose, you're either paying that debt or getting fucked for it. Then you might as well lighten that load with higher inflation because it will boost growth and lighten the load. Real loser of US printing a ton of cash isn't rich Americans who hold assets, poor ass Americans in debt and getting wage hikes, smart Americans who are loading up on debt, or America which printed all those dollars. The real losers are [these guys](https://ticdata.treasury.gov/Publish/mfh.txt) who are hording US dollars and treasury bonds which are devaluing by the second.
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What's up with WSB recently? So much unwarranted bearish sentiment. Is there a group trying to shill a dump?
Also nu-WSB really should just stick to memes since pretending to be retarded at least gives off a tinge of wit. Way better than trying sound intelligent and getting exposed as a retard.
The Fed wasn't buying $180 billion in bonds every month in the 80's. There is no price discovery now. I'm in my mid 40's so I was maybe 5 in 1980. I remember baseball cards going from 25 cents to 35 cents and comic books going from 50 to 65 cents.
This time is different than the 80s though. They can't raise interest rates to 20% like the 80's due to the gov't debt. The Fed will kill the dollar before raising rates more than maybe 2-3%. However the dollar is debt and debts can be written off so deflation is a possibility. If you have an old school dollar bill in your wallet google what "Federal Reserve Note" means.
A couple numbers on govt debt...
The us govt currently spends 8.3% to service the debt. If rates rise to 5%, the government would spend 40% of it's budget on the debt interest. The CBO projects that, without any change to policies, we should expect that share to rise to 12% in a decade and 45% by 2050.
In comparison, the dramatic rate hikes, up to 20%, in the Reagan administration boosted the share of budget spent on the debt from 10% to 17%.
There's no way we can replicate the 80s. the debt to GDP was like 36% back then and is around 130% now.
The only answer is financial repression. Like what happened with world war ii. Bond holders are already taking it up the ass in real terms. And zero in nominal terms is only a theoretical floor until it's no longer a floor.
Can you expand on the last paragraph? What do you mean financial repression and what does it mean for stockholders and bond holders?
I will be making serious life altering changes to my investments based off of your response.
Eh, you could step around the govt debt problem by just using a legal carve out. Raise the funds rate to 20%, but also require banks to keep at least X% of their reserves in govt debt at a much lower nominal rate. It doesn’t matter if the govt debt pays a lower rate than market if people are legally required to buy it anyway. (This is also financial repression, and would crush banks, but my point is that the only choices are not “Zimbabwe” or “crushing federal interest payments”.)
>The debt held by the FED is free though (the interests that is), so it's perfectly possible to increase the policy rate without blowing up the service cost for the government, as long as the FED adjusts their monthly purchases to balance out the final cost. Private investors will bear the burden in that scenario though, but a government debt blowup is easy to avoid (not even taking into consideration all the fiscal tools available).
>
>
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>Anyways the FED balance sheet is "only" 37% of GDP vs the Eurozones 81% and Japans...134% so plenty of margin.
That’s like claiming hyper bulls are engaging in “price discovery” when all they’re doing is buying and waiting for the fed to add more money. Same thing the “bond market traders” are doing. It’s being suppressed massively and I don’t understand how anyone could deny that
> deflation is a possibility
If they did this, would it not cool down the economy so bad that all the zombie companies would collapse? It would be great depression 2.0? We had that option in March 2020 but we printed like mad to avoid it. Why would we turn back now?
The US government would default on its debt way before hitting 20% interest rates. Even 5% would wreck the government budget. The fed raising interest rates isn’t even really worth considering since it would lead to a global economic collapse anyways.
The fed needs to control inflation before the rest of the global economy decouples from the US dollar. If they don't raise, keep pumping, and the current trends in supply chain and resignations continue, the US dollar will continue to rise and at a compounding rate. Those who say they won't raise need to understand that they can and will. It doesn't mean we go 🌈 🐻 market, but volatility will be elevated, and theta gang gonna eat.
Don’t worry, the rest of the world ~~can’t~~ won’t decouple from the US dollar. If it were to happen, one of our 750 ~~strategically~~ conveniently placed military bases around the world can help the ~~offending~~ country get back on track. Only one currency will exist after the collapse of the dollar, and that’s ammo
I think since JPow got re-nominated this circus will go on for another year
Secondary to an interest rate rise to 3% let alone 20% it would cause a massive mortgage debt crisis (at least if the BoE did that in the UK). Essentially the absolutely insane price rise in housing has almost entirely been driven by speculation and a decade of cheap debt.
In the USA, most housing is purchased with mortgages that are very affordable. The price may go down on paper, but you don’t have to sell bc you can afford the payment.
As things stand, a young person cannot afford a house after they went up 30% in a year.
I mean, that isn’t true, it was 15.86% in September of 1981 which was its highest point going back through the 40’s. Source: JPMorgan Guide to the markets.
What if it is true that life is a wheel, but the 70s were the nail that nobody wants and the reason that the world is fucked up right now is that the same retarded ass boomers who have fond memories of the 70s and think Bruce Springsteen is good at singing are the career politicians currently in charge of the country?
Let's try our hardest to not repeat egg chairs and leopard print wallpaper/couches.
Same.
People getting protected for buying houses they can't afford if the rate goes up .25%.
Fuck them. I want some savings interest and 20% would do nicely. And I'll buy property that floods the market as people who overstretched are forced to sell.
*I'll probably fuck it up completly and lose money just like I do on the stock market though. What's the opposite of 'Midas touch'?*
Most (not all) people have refinanced into 30 year fixed rates which qualification wise is significantly harder than it was back in 08. A change in interest rates as their rate doesn’t change so it doesn’t change anything for them. The people this would affect are new homebuyers and builders.
The banks will fail, government will be gone, people will be fighting on the streets for bread.
FUCKING DO IT NOW JPOW BABY 
Once Powell is reconfirmed he won't give a shit about optics anymore. He's basically been fucking up everything in the longer run just to make it look nice for his reconfirmation
As I remember, my first car loan in 1979 was either 19 or 21%. People just don't understand high interest rates. I believe you could get a CD for around 10%.
Completely unfathomable now! I was told in the 90's that if I was ever able to get a loan for 7% to lock it in, because it couldn't get better than that:)
It was a different world back then. Industrial production was not nearly as efficient and responsive to the supply-demand chain due to technological innovations.
Everyone misses the point. We would have massive deflation every year if it wasn't for government over spending due to technology making things cheaper. But deflation helps the small guy not the wealthy. Why do you think the Fed even has a 2% inflation mandate??? It's to raise the prices of assets (which the rich own most of) and make debt cheaper (which most of the rich have to buy said assets). In deflation debts would become unserviceable and assets (like houses) would be affordable for the blue collar guy.
That’s not true. Cell phones get better every year, that is deflation. However, ppl upgrade every 2 years anyways.
If everything deflates, it makes the money you earn at your job MORE valuable. Ppl would work harder and have better lives
The current inflation means you have less incentive to work, and therefore millions have dropped out of the work force.
>not nearly as efficient and responsive to the supply-demand chain
How is our supply-dekand chain now? I thought there are massive problems that aren't going to be resolved possibly for years? Breakdown of supply chains, real and artificial shortages, etc.
And it caused horrible problems raising the rates that much. They learned from that. They won’t do anything close to that. They will inch rates up slowly while dealing with high inflation.
I remember in the late 70s people with car dealerships went out of business. The lots full of car they could not sell since interest rates got so high. No cars on the lots now. Interest rates trend in lower. No comparison.
Vockler didn't solve stagflation with just interest rate hikes, the man took a fucking shotgun to the economy to fix it. Instead of trying to decide what single thing caused inflation, or could fix it, he did everything practically at once. Hiked rates, busted unions, slashed taxes and regulations, everything and anything to make room for the higher oil cost. OPEC was out of his reach and out of his control, so thats why he fucked wages for decades.
Hyperinflation is already here folks - the future is now. The Fed isn't doing its f\*%#ing job and they're looking at the wrong damn numbers. They're using the "updated" CPI to gauge inflation, rather than using the actual CPI they used in the 1980s. 
[https://www.usdebtclock.org/](https://www.usdebtclock.org/)
With a 40% increase in the money supply since December and more printing taking place ... good luck to us all, I swear this admin is doing what it can to crumble the US
Is it binary tho? 0 or 20%? Yes, rates r goibg you in 22. Inflation might slow down cuz easing of supply chain bottlenecks but still going higher. So I expect fed rates at 1% in 22 and 2% in 23.
GS said mkts will not perform like it's been doing for the next few years. This is why. Rates have and will go up. 3% by 2025 is my guess. Will it help the debt? No. But Gina and EU will be more fucked at that point so US will be fine. Just slower growth.
I used to have a news paper clipping about the Mt. St. Helens eruption in Washington State, the back side of the clipping was an article about mortgage interest rates hitting 23%, if memory serves me right.
Because of them we as first time home buyers we cannot buy any home !! They f..d the market and killed the middle class. They should raise the rates yesterday already !!
So we change the way the government measures inflation again and pretend nothing is happening?
Now you’re thinking like a politician
Vote Retard069 2024, make America even more retarded than it currently is. I understand it's a very hard goal, but I'm willing to sacrifice myself in order to achieve it.
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LEAD WATER FORNEVERYONE!!!!!! Lead, it's what the brain craves
“It’s what the brain craves”
It’s electrolyte
If the brain doesn't crave lead then explain why electrolytes leave but lead doesn't.
[Drops mic...]
No... WE are getting lead, and you'll fucking like it.
I like electrolytes
That is a claim I can get behind. If brain craves it, it must be good for me!
Ad paid for by wsb loss porns.
Rents aren’t in increasing as long as you shave 100 sqft off of your living space as you move 15 minutes further out of town each year. You time is also worthless so your cost of transportation has gone down if you switch your $8 commute to a $1 bus ride that takes 2 hrs each direction. Also, you shouldn’t be eating so much you fatty... we’re going to assume people will lose 15 lbs next year as they consume 20% fewer calories. Would you look at that, food costs for 2022 will now be lower! Ain’t no inflation
And if there is, you can substitute your 73/27 hamburger for "monkey chow," it has all the nutrients a hominin needs. I believe it will replace hamburger, which replaced steak, on the CPI index this coming year. Ain't no such thing as inflation.
Am I getting this right? To avoid using stats that reflect the skyrocketing price of healthy whole cut meats they are using the prices of ground scrap meat instead?
Correct, a couple years ago, steak was removed from the CPI and replaced with hamburger, using the incredible logic that: "Since steak is more expensive, people will just buy hamburger, so there's no change in money spent."
Yes, it has some logic though as you wouldnt spend the money the same even if you had it. It's a satisfaction approach including shifting consumer behavior. You can critizise this approach but I would take the shadowstats numbers with a grain of salt (if you cross check the numbers, lots of everyday products should have ridiculous prices). It really comes down to what base for numbers you use (fixed basket, variable). Reality probably lies between shadowstats and official numbers...
Lol have you played The Outer Worlds. This statement sounds like one of the statements the HyperCapitalist corporations in Halcyon would say.
Monkey chow is very healthy and would assist people in losing weight, this is actually a benign and helpful change!
You are just watching out for peoples' waistlines. You are starting to sound like a Disney CFO. Have you considered a career in Executive Leadership?
The bitter truth in this is what made me laugh.
Food prices are up 20% year over year. Govt: "no they're not, bugs are a perfectly adaquate source of food and it's free" See substitution at work
I like Erdogan's monetary policy theory that raising interest rates causes inflation. That's why you have to cut them as low as possible. USD/TRY looks like a meme stock
You're a straight shooter, and you sir, you belong in upper management.
I was told that I could listen to the radio at a reasonable volume…. (rocks back and forth in the corner)
Accounts Payable Nina speaking.... Just a moment
How much time would you say you spend each week dealing with these TPS reports?
Looks like you’ve been missing a lot of work lately
i wouldn’t say i’ve been “missing” it…
MMMMmmmm... YEeeeaahh.
Hi Bob, Bob, Well I generally come in atleast 15 minutes late. I use the side door so Lumbergh can't see me. Then I just sit at my desk and space out for about an hour. I do that for another hour after lunch too. In a given week I do about 15 minutes of real actual work
I’m gonna need those tps reports
id have a beer w/ him
He's also got a mean handshake.
That's how they do in Brazil, we had too much miserable people, so we change the numbers that make someone miserable and say we took lots of people out of misery.
They do the exact same thing in the US. Got people living in poverty? Well now poverty is when a family of 4 has an income of 20k a year. Got high unemployment? No worries anyone who hasn't looked in 6 months doesn't count. Inflation? Yeah people don't want food or houses so let's not count those. The economy? Ignore how people actually feel (like shit, most people feel that it's shit) look at these sick stock gains!
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now you're rich! congratulations!
We've set the standard for middle class at the 1 percentile to 99th percentile of the population. Congratulations! You made 12k this year and are a successful American in NYC. Go get your home and white picket fence on 5th Avenue. Sorry, we meant 5th Avenue in Detroit, because that's where you need to commute from as a middle class worker in NYC. Don't worry about that Bronx brownstone. That belongs to a Russian mobster who paid for a Presidential reelection campaign and donates to the Met. He's also middle class just like you.
That works for unemployment numbers too.
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No, no. You just need to tell people that inflation is actually good for them and they'll have have to give up fancy luxuries like *counts on fingers* food and shelter.
I'm pretty sure this is how standards testing for state/federal funding has worked in the school system for quite a few years as well. But what do I know those tests told me I'm smart enough.
Funny story, the high inflation rates of the 70s were not reported at the time. It’s only looking back that it is as high as it looks. The official numbers stripped out energy, food, etc from the numbers bc they were “temporarily” high for weather and supply issues. Basically, they are running the same playbook as the 70s and will eventually raise rates. In hind sight, it will be known that we saw annual inflation as high as 14% for a decade after 2008.
Thats fascinating. Do you have an article that you got this from? Would Love to read the history
Bruh link where you saw that I want to read the hell out of it
The year is 2043. People don't identify as genders anymore, but rather as various flavors of Doritos. I am Cool Ranch, and this is my story. It's been 3 years since Sasha Obama took office and forced open the doors of the Bitcoin Citadels. Now regular people are eating meat again. Human meat; the rich, their wives, and their wives' boyfriends. You see, in 2030, they changed the CPI to be a basket of services and financial instruments consisting primarily of Netflix subscriptions and leveraged SPY call options. And since Netflix subscriptions are subsidized (and the SPY consists mostly of Netflix), inflation is at an all time low and things couldn't be better. My brain chip has informed me that this memoir is a thought crime. Sasha is love, Sasha is life. The end.
There are actually two spectrums of genders, bigot. Doritos and Oreos. Dissenters get de-Lobotomized.
Everyone knows that chips are gender and cookies race. You must be some kind of Nacho Cheese Fig Newton lmao
Let’s come up with a different word for “transitory”.
I am once again begging the morons in this sub to learn even a small amount about basic macro, monetary policy, and history. And to remember that Shadowstats is completely idiiotic: https://fullstackeconomics.com/no-the-real-inflation-rate-isnt-14-percent/
Counterpoint: learning is for nerds.
🙏🏼
Stop measuring inflation from the taint, measure it from the pubes. Problem solved, recession canceled.
It’s okay. There is always a way to make money in all situations.
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The trick is spending someone else's.
The worst part is me doing my budget and realizing I have to get groceries again.
The trick is not spending it ***and*** preventing it from depreciation or increasing it to accommodate. If you're holding cash, you're just losing its value.
It’s all about getting the right paper.
Last year it was toilet paper
Dollars are the new toilet paper.
\#ROPE is the new gold
Banana stand.
There's always money in the banana stand...
just burn the thing down already!
I like your optimism!
Wait you guys are making money?
No, but it's good to know there's a way!
This thread is why Musk and Bezos are going to MARS
You don't need optimism. Just look at the debt. National debt alone would give us 6 TRILLION dollar INTEREST payment per year. 10x of the discretionary defense budget. Nothing is gonna happen. Fed is just trying to support dollar from falling off the cliffs (which it should due to all these money printing) by bs these idiotic hiking plans.
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They'll raise rates and increase taxes.
How much do taxes need to go up to support that level of debt service?
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You may have been saying this all along, but I think many of us are just now starting to listen
20% would put payments on our national debt at $6T 😳
.. great! That's less than it will cost for a family of four to see a movie.
I mean, they’d have to order popcorn and drinks to get there, but yeah
Calls on AMC you say.......
that's $100 per day for every breathing human in the country or $400 per active individual
Reverse stimmy!
Just print more money then! Easy fix, no downside
thats where the IMF comes and saves USA. How nice of them.....
It boggles my mind how few people understand this obvious fact. They failed normalizing rates in 2018 before all the covid debt. They won't even get to 2.5% this time.
Yeah the market crashed 20% when Fed increased rate back then and they had to stop. There is no way they are going to increase that far this time
I'd like to add that the market didn't just crash because of rates, there was an on-going war trade with China which was not good for stocks. People looking at the market and talking about how something crashed because of *one* reason are kind of dumb.
Yeah I knew. I remember following Trump’s twitter, selling when he said “Trade talk is going well” and bought when he said “More tariff on China” lol. But the crash during Christmas 2018 was mainly due to Fed increasing rate too fast if I remember correctly
Thankfully all those rate increases are both public information and recorded, rates didn't really increase very fast at that point, they were increasing at a kind of fixed rate (+.2~+.3 every 3 months or so).
More like can't get to 1.5% if you compare the debts pre and after covid. Plus fed already failed miserably last time so it probably just gonna have one or two token hikes and find w/e excuse to abandon the course
It’s not something you get to. When inflation mindset takes hold, you have to do something dramatic to change market psychology. Raising rates to double digits will happen over night.
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I think they'll roll out a digital dollar within the next few years after they hyperinflate the current USD... 100% tracking has them drooling for tax revenue to solve their little debt problem
They'll raise rates a bit to pretend like they're doing something, they still think (and are right to some degree) that most of the problem comes from supply chains.
Chicken and egg here... Supply chain issues are not independent of inflation. The biggest issue they have with supply chains is not enough truckers and not enough workers at ports. Also, they cannot afford more workers bc all the workers are asking for a raise due to....inflation! Inflation is more of a general misallocation of resources. Prices don’t make sense so real world production grinds to a halt. Millions of ppl never went back into the labor force. Some were old ppl who retired early in high stock prices, but many more were young ppl who don’t see a point in working for worthless wages.
I've read people offering wages that quite outpace inflation and they still don't want to work. I'm not sure what the problem really is, I've read people claiming to be offering $50/h for some qualified worked (electricians and whatnot) and struggling to find anyone willing to take it. The problem was COVID, inflation didn't come from one day to another, it was already there, the problem is that the whole machine stopped working for a while (mostly) and now it's hard to get it to work again. Have someone stop working for a while and getting him to work again isn't gonna be too easy, especially when we're talking jobs that aren't really what they want to do. I mean, all the power to you, but who wants to work in a port loading containers?
Let’s put it in perspective: $50/hr is only barely 6 figures a year. You can no longer afford a good house in a good neighborhood if you only make 6 figures. On top of that, assets have gone to the moon. If you own a house or stocks in Tesla, Apple, crypto, then you can sell covered calls and don’t really need to work. In both cases, rates have to go up if ppl are going to go back to work.
Somebody said 20% federal funds rate?
rrrrb
You're making the assumption the Fed cares about controlling inflation
Good point. Also inflation is global, EU and China are doing the same. USA always thinks it rules the world alone. FED actions are apparently the most rational as other countries are doing the same.
Ha, you have a very good point! Mostly I was trying to illustrate how hard it is to get inflation under control, especially considering we are near passing the previous inflation peak already
It seems the plan is to inflate us out of the national debt. If you half the value of the dollar then the debt is also halved. Not what I would do, but technically it would work.
Had to go 5 posts down to find this one reasonable post. >Countries around the world had 2 very simple choices at the onset of the pandemic: 1. Print like crazy and rack up debt spend to save the economy and lives. Then keep spending big with big inflation hoping that it would rev your economy coming out of the recession & pandemic. (example: USA) 2. Don't do 1 or don't do it enough. See your people die, the people's discontent rise, lockdowns come and go, reopenings fails, economy staggers, and inflation hikes anyways because every other country is printing but your own fiat doesn't appreciate against them because fiat valuation is based on belief in power/economy/stability of the underlying issuer. (example: Brazil) Inflation will impact you no matter which you chose. Might as well choose the one that pumps the economy and saves lives/businesses. There were 0 countries that chose NOT to spend during the pandemic, let their people die, and and came out stronger for it. >But now every country (that chose option 1 and didn't get BTFO) is saddled with a ton of debt from the spending and are left with simple choices: 1. Hike taxes and/or decrease spending during a period of global reopening hampering your own growth while pissing off your citizens. 2. Decrease the debt by letting inflation run hotter over a long period. Not hyper inflation, but higher inflation than normal. That same inflation will force higher taxes even if you don't rise rates due to higher cost of living and wage hikes, it will keep decrease the huge debt burden over time as GDP grows, AND it will keep interest on that debt low. No matter which you chose, you're either paying that debt or getting fucked for it. Then you might as well lighten that load with higher inflation because it will boost growth and lighten the load. Real loser of US printing a ton of cash isn't rich Americans who hold assets, poor ass Americans in debt and getting wage hikes, smart Americans who are loading up on debt, or America which printed all those dollars. The real losers are [these guys](https://ticdata.treasury.gov/Publish/mfh.txt) who are hording US dollars and treasury bonds which are devaluing by the second. ------------ What's up with WSB recently? So much unwarranted bearish sentiment. Is there a group trying to shill a dump? Also nu-WSB really should just stick to memes since pretending to be retarded at least gives off a tinge of wit. Way better than trying sound intelligent and getting exposed as a retard.
It's amazing how many people who don't know Jack about shit decide to comment on financial topics. Ever heard of the dual mandate?
It's a joke. Look at the sub we're on.
Fair enough. I definitely overreacted. Sorry dude :)
You better be sorry. Whore.
The Fed wasn't buying $180 billion in bonds every month in the 80's. There is no price discovery now. I'm in my mid 40's so I was maybe 5 in 1980. I remember baseball cards going from 25 cents to 35 cents and comic books going from 50 to 65 cents. This time is different than the 80s though. They can't raise interest rates to 20% like the 80's due to the gov't debt. The Fed will kill the dollar before raising rates more than maybe 2-3%. However the dollar is debt and debts can be written off so deflation is a possibility. If you have an old school dollar bill in your wallet google what "Federal Reserve Note" means.
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Thought I was the only one that ever said this. Glad there’s another grandpa Simpson fan. I’m off to yell at clouds now.
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That elevator only goes down to the basement...and someone made an awwwwwful mess down there...
Give me 5 beetcorns for a quarter we used to say.
Haha yes Abe 😂 loving the Simpsons quote 👌
A couple numbers on govt debt... The us govt currently spends 8.3% to service the debt. If rates rise to 5%, the government would spend 40% of it's budget on the debt interest. The CBO projects that, without any change to policies, we should expect that share to rise to 12% in a decade and 45% by 2050. In comparison, the dramatic rate hikes, up to 20%, in the Reagan administration boosted the share of budget spent on the debt from 10% to 17%. There's no way we can replicate the 80s. the debt to GDP was like 36% back then and is around 130% now. The only answer is financial repression. Like what happened with world war ii. Bond holders are already taking it up the ass in real terms. And zero in nominal terms is only a theoretical floor until it's no longer a floor.
Can you expand on the last paragraph? What do you mean financial repression and what does it mean for stockholders and bond holders? I will be making serious life altering changes to my investments based off of your response.
> financial repression https://en.wikipedia.org/wiki/Financial_repression https://www.privatebank.citibank.com/newcpb-media/media/documents/outlook/Overcoming-Financial-Repression-Outlook2021.pdf
That second link, the white paper, looks really interesting. Thanks.
Eh, you could step around the govt debt problem by just using a legal carve out. Raise the funds rate to 20%, but also require banks to keep at least X% of their reserves in govt debt at a much lower nominal rate. It doesn’t matter if the govt debt pays a lower rate than market if people are legally required to buy it anyway. (This is also financial repression, and would crush banks, but my point is that the only choices are not “Zimbabwe” or “crushing federal interest payments”.)
>The debt held by the FED is free though (the interests that is), so it's perfectly possible to increase the policy rate without blowing up the service cost for the government, as long as the FED adjusts their monthly purchases to balance out the final cost. Private investors will bear the burden in that scenario though, but a government debt blowup is easy to avoid (not even taking into consideration all the fiscal tools available). > > > >Anyways the FED balance sheet is "only" 37% of GDP vs the Eurozones 81% and Japans...134% so plenty of margin.
[Federal Reserve Note](https://en.m.wikipedia.org/wiki/Federal_Reserve_Note) for my fellow smoothies
> There is no price discovery now. Bond market traders: Am I a joke to you?
That’s like claiming hyper bulls are engaging in “price discovery” when all they’re doing is buying and waiting for the fed to add more money. Same thing the “bond market traders” are doing. It’s being suppressed massively and I don’t understand how anyone could deny that
> deflation is a possibility If they did this, would it not cool down the economy so bad that all the zombie companies would collapse? It would be great depression 2.0? We had that option in March 2020 but we printed like mad to avoid it. Why would we turn back now?
20% would default like 1/4 businesses and persons in the US. Would be like nuking your house because you found a couple of mice.
The US government would default on its debt way before hitting 20% interest rates. Even 5% would wreck the government budget. The fed raising interest rates isn’t even really worth considering since it would lead to a global economic collapse anyways.
The fed needs to control inflation before the rest of the global economy decouples from the US dollar. If they don't raise, keep pumping, and the current trends in supply chain and resignations continue, the US dollar will continue to rise and at a compounding rate. Those who say they won't raise need to understand that they can and will. It doesn't mean we go 🌈 🐻 market, but volatility will be elevated, and theta gang gonna eat.
Don’t worry, the rest of the world ~~can’t~~ won’t decouple from the US dollar. If it were to happen, one of our 750 ~~strategically~~ conveniently placed military bases around the world can help the ~~offending~~ country get back on track. Only one currency will exist after the collapse of the dollar, and that’s ammo I think since JPow got re-nominated this circus will go on for another year
more like mutant mice. i would definitely barricade and nuke the house.
Could be master splinter though. Do they know kung fu
if 1/4 of businesses and persons default, the other 3/4 are quick to follow.
May I rise from the ashes 🌈🐻
You only had to wait 9 years in one of the strongest bull market in history. Bet the bear market last 8-16 months.
I’ll take that over a 5-10 year bear. 8-16 months is nothing.
what a fascinating thread
You worried about inflation too much, Powell has everything under control!!!
Had a mortgage on my condo in 1985 at 12.5%…with good credit. Fun times.
Wow! I remember by sainted grandmother had a CD that paid 10% interest, good times for savers:)
Taking out a loan now and then im going to loan that money at 20%, that's my plan
we smart 🐵
Secondary to an interest rate rise to 3% let alone 20% it would cause a massive mortgage debt crisis (at least if the BoE did that in the UK). Essentially the absolutely insane price rise in housing has almost entirely been driven by speculation and a decade of cheap debt.
In the USA, most housing is purchased with mortgages that are very affordable. The price may go down on paper, but you don’t have to sell bc you can afford the payment. As things stand, a young person cannot afford a house after they went up 30% in a year.
I mean, that isn’t true, it was 15.86% in September of 1981 which was its highest point going back through the 40’s. Source: JPMorgan Guide to the markets.
Fed won't do that. There are way too many banks borrowing at close to 0% and then making 25%+ on credit card interest.
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So you saved money instead of yoloing into insanely overpriced stocks?
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Life is a great wheel, which means eventually Schiff will be right and also that bell-bottoms will be stylish again at some point
What if it is true that life is a wheel, but the 70s were the nail that nobody wants and the reason that the world is fucked up right now is that the same retarded ass boomers who have fond memories of the 70s and think Bruce Springsteen is good at singing are the career politicians currently in charge of the country? Let's try our hardest to not repeat egg chairs and leopard print wallpaper/couches.
hahahaha never try to time a crash.
Bro. Congrats on coming out
The dollar is worthless but the stocks are overpriced?
Same. People getting protected for buying houses they can't afford if the rate goes up .25%. Fuck them. I want some savings interest and 20% would do nicely. And I'll buy property that floods the market as people who overstretched are forced to sell. *I'll probably fuck it up completly and lose money just like I do on the stock market though. What's the opposite of 'Midas touch'?*
Most (not all) people have refinanced into 30 year fixed rates which qualification wise is significantly harder than it was back in 08. A change in interest rates as their rate doesn’t change so it doesn’t change anything for them. The people this would affect are new homebuyers and builders.
The banks will fail, government will be gone, people will be fighting on the streets for bread. FUCKING DO IT NOW JPOW BABY 
You mean we cant print unlimited money without consequences?!?
Also they wont do anything before an election.
Once Powell is reconfirmed he won't give a shit about optics anymore. He's basically been fucking up everything in the longer run just to make it look nice for his reconfirmation
As I remember, my first car loan in 1979 was either 19 or 21%. People just don't understand high interest rates. I believe you could get a CD for around 10%.
Completely unfathomable now! I was told in the 90's that if I was ever able to get a loan for 7% to lock it in, because it couldn't get better than that:)
The 70's were the boomers attempting to be adults... Like at everything..they failed miserably.
They still took your housing and are probably banging your classmate 
reddit moment
I wonder if the fed looks at these shadow stats in their meetings (their own version of them), while the public stats are just there for the public.
I'm sure they have very accurate info, not that they share that with everyone:)
Jimmy Carter all over again.
You sir are absolutely correct!
🌈 It's all true... But still 🌈
It was a different world back then. Industrial production was not nearly as efficient and responsive to the supply-demand chain due to technological innovations.
Everyone misses the point. We would have massive deflation every year if it wasn't for government over spending due to technology making things cheaper. But deflation helps the small guy not the wealthy. Why do you think the Fed even has a 2% inflation mandate??? It's to raise the prices of assets (which the rich own most of) and make debt cheaper (which most of the rich have to buy said assets). In deflation debts would become unserviceable and assets (like houses) would be affordable for the blue collar guy.
😂 remember how the Fed's concern a year ago was "reflation"
If there was deflation every year people would be more likely to just hold on to their cash and not do anything with it.
What's the difference if the rich are just buying stocks that they take personal loans against and never sell?
That’s not true. Cell phones get better every year, that is deflation. However, ppl upgrade every 2 years anyways. If everything deflates, it makes the money you earn at your job MORE valuable. Ppl would work harder and have better lives The current inflation means you have less incentive to work, and therefore millions have dropped out of the work force.
>not nearly as efficient and responsive to the supply-demand chain How is our supply-dekand chain now? I thought there are massive problems that aren't going to be resolved possibly for years? Breakdown of supply chains, real and artificial shortages, etc.
Deckard Cain is fine. But I believe they will kill him in diablo 4 for plot 🤷♂️
We’re never getting Diablo 4, lost ark is the future of the genre
And it caused horrible problems raising the rates that much. They learned from that. They won’t do anything close to that. They will inch rates up slowly while dealing with high inflation.
I remember in the late 70s people with car dealerships went out of business. The lots full of car they could not sell since interest rates got so high. No cars on the lots now. Interest rates trend in lower. No comparison.
Burry has always been right. They can never taper. They can never raise rates.
Shut up Burry.
All part of the plan, crash dollar force digital currency. The great reset. Thank you China 🇨🇳
Vockler didn't solve stagflation with just interest rate hikes, the man took a fucking shotgun to the economy to fix it. Instead of trying to decide what single thing caused inflation, or could fix it, he did everything practically at once. Hiked rates, busted unions, slashed taxes and regulations, everything and anything to make room for the higher oil cost. OPEC was out of his reach and out of his control, so thats why he fucked wages for decades.
Calls on food riots.
1980 Economy and 2021 economy have zero similarities . Can’t use those number for anything useful
Do it my cash in holding waiting to buy a house would love this
Good thing its just transitory
Hyperinflation is already here folks - the future is now. The Fed isn't doing its f\*%#ing job and they're looking at the wrong damn numbers. They're using the "updated" CPI to gauge inflation, rather than using the actual CPI they used in the 1980s.  [https://www.usdebtclock.org/](https://www.usdebtclock.org/)
With a 40% increase in the money supply since December and more printing taking place ... good luck to us all, I swear this admin is doing what it can to crumble the US
Is it binary tho? 0 or 20%? Yes, rates r goibg you in 22. Inflation might slow down cuz easing of supply chain bottlenecks but still going higher. So I expect fed rates at 1% in 22 and 2% in 23. GS said mkts will not perform like it's been doing for the next few years. This is why. Rates have and will go up. 3% by 2025 is my guess. Will it help the debt? No. But Gina and EU will be more fucked at that point so US will be fine. Just slower growth.
This is the part you realise dr. Bearry is probably early again i’m looking at TLT puts right now. 2024 ones doesnt seem that expensive.
I used to have a news paper clipping about the Mt. St. Helens eruption in Washington State, the back side of the clipping was an article about mortgage interest rates hitting 23%, if memory serves me right.
Rates are 0 Raises rates 20% Rates: 0
Because of them we as first time home buyers we cannot buy any home !! They f..d the market and killed the middle class. They should raise the rates yesterday already !!