Topic: . - page 2. (Read 3159 times)
there is too much debt in the US and if the FED raises rates it will surely burst the stock bubble and probably start a new recession. If you read their statements they don't say that they are going to raise rates..they say they may start THINKING of raising rates, which means they are not even considering a rate rise for now..
The money is technically at deposit by the commercial banks at the Fed. They can't loan them out because the creditworthy aren't demanding, and they aren't supplying the uncreditworthy.
With that large of an increase in the supply of money, an inflation would normally be expected, but velocity dropping to record lows prevented it.
People are tapped out after foolishly selling at the bottom of a housing collapse, taking most families source of net worth and transferring it to hedge funds. It's the stock market's turn to make us think we're richer than we really are. We should be hearing more of that over the next few years.
People were forced into default, and that was planned, to transfer the house ownership to banks, and then central banks print some money to buy it to support the house value
Anyway all those money are created out of nothing, it is a race between banks playing more tricks and people finally realizing the scam and abandon the currency like what happened in Mississippi bubble. But unlike during Mississippi bubble, now there is no gold convertibility, it is difficult to discredit fiat money at this stage
Oil isn't going to $20 (you can quote me on that). America will keep pumping the old wells but investment has fallen so much already that production is already bound to fall.
People talk abut efficiency savings, that is marginal and overcome by a growth in population.
I expect $100 oil within the next 2 years, it might not stay that high, but I think it will reach that high.
People talk abut efficiency savings, that is marginal and overcome by a growth in population.
I expect $100 oil within the next 2 years, it might not stay that high, but I think it will reach that high.
Small adjustment like interest rate is irrelevant now, the base money supply has increased by 500% since 2008. If GDP increase 5% per year, it will take about 30 years to reach that amount of money supply, and they have done it in 6 years, so they will not need to print money for the next 24 years, is that possible?
Since all of those money is already in the hands of commercial banks, we could imagine that there would be huge inflation due to 5x more money out there, but there was no inflation. This indicated that no matter how much money they print, money just can't get into the economy in any meaningful way. In fact banks have raised the criteria to get a loan, and the real income of the whole society is going down due to less loan and less consumption
Now people's mindset have changed to saving, that will last for decades, and any tightening of money supply will trigger a recession for sure
Since all of those money is already in the hands of commercial banks, we could imagine that there would be huge inflation due to 5x more money out there, but there was no inflation. This indicated that no matter how much money they print, money just can't get into the economy in any meaningful way. In fact banks have raised the criteria to get a loan, and the real income of the whole society is going down due to less loan and less consumption
Now people's mindset have changed to saving, that will last for decades, and any tightening of money supply will trigger a recession for sure
You forgot never, and NIRP
Well said. I also vote that they most likely will never increase rates by any reasonable amount (say > 3%) and we even stand a possibility of negative rates. The NIRP is expanding, get ready for it
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