St's "not so bad" inflation last month has the feds doing another massive rate hike. We are now headed for at least a minor biden-cession. This means, expect an increase in unemployment as we try to tamp down demand.
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"Not so bad" inflation has fed hiking rates.
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Originally posted by CivilDiscourse View PostSt's "not so bad" inflation last month has the feds doing another massive rate hike. We are now headed for at least a minor biden-cession. This means, expect an increase in unemployment as we try to tamp down demand.
And I'm dubious that we aren't already in a biden recession. I might be a tad cynical in my old age."He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot
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Originally posted by Teallaura View Post
Um, I think the car was already over the cliff edge. I think we're just seeing gravity in action now.
And I'm dubious that we aren't already in a biden recession. I might be a tad cynical in my old age.
I'm always still in trouble again
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Originally posted by CivilDiscourse View PostSt's "not so bad" inflation last month has the feds doing another massive rate hike. We are now headed for at least a minor biden-cession. This means, expect an increase in unemployment as we try to tamp down demand.
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Originally posted by Zara View PostOhh no, interest rates heading out of absurd lows, how terrible, that bad Biden.
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Originally posted by seanD View Post
High interest rates in an over-leveraged market and an economy with insanely high levels of debt (both public and private) is a recipe for disaster. We're already beginning to see the effects of the former; we've yet to see the effects of the latter.
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Originally posted by Zara View Post
Right, so keep rates low so that you can borrow more at insanely low interest rates. Don't take on debt you can't afford, rates were going to increase at some time - chickens, roost.
The problem is that it's highly doubtful the Fed raising rates will actually curb inflation and not just exacerbate a recession at the same time.
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Originally posted by seanD View Post
Correct. It's a catch-22.
The problem is that it's highly doubtful the Fed raising rates will actually curb inflation and not just exacerbate a recession at the same time.
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Originally posted by Zara View Post
People are using low cost credit to buy stuff, people will now either keep money in the bank for interest or not borrow, not buy stuff, inflation decreases - unless of course, inflation is a function of international problems, in which case, you get a bit poorer, that's life.
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Originally posted by seanD View Post
People are using low cost credit to buy non-discretionary goods they can't afford otherwise because of inflation. They can't keep money in the bank because they're also depleting their savings to buy non-discretionary goods.
Your solution is to allow people that can't afford it, to borrow more, to live - a bad solution.Last edited by Zara; 09-22-2022, 04:31 PM.
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Interestingly enough, every time I turn around, it seems, Markus is HIKING my savings account interest rate (currently 2.25%).
(obviously in attempt to offset some of the pain of inflation, though woefully behind)The first to state his case seems right until another comes and cross-examines him.
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Originally posted by Zara View Post
Non-discretionary goods became more expensive because of, what exactly? Why are people in the US so poor, that they can't afford a 10% increase in non-discretionary goods?
Your solution is to allow people that can't afford it, to borrow more, to live - a bad solution.
Non-descretionary goods became expensive because of the same reason everything else became expensive (not sure if that was rhetorical question) -- inflation. The inflation was a result of global central banks unprecedented money printing. The excess money created excess demand at the same time supply was smothered globally by pandemic and lockdowns, and this happened on a global level. Personally, I believe we've still yet to see the full effects of that (as there is a lag effect to inflation), which is why I'd be surprised if inflation actually started to fall consistently anytime soon, especially considering central banks are still grossly behind the curve of fighting it.
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Originally posted by Cow Poke View PostInterestingly enough, every time I turn around, it seems, Markus is HIKING my savings account interest rate (currently 2.25%).
(obviously in attempt to offset some of the pain of inflation, though woefully behind)
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