January 24, 2022
Here is a reasonable diagnosis of the current FINANCIAL condition:
Inflation will outstrip any wage raises by a ratio of 2 to 1.
The Fed has no choice but to tighten - raising interest rates and
inflicting more pain on the debtor society America has become.
The
many business models that depended on never-ending 'free' money (zero
rates) will fold taking untold Wall Street investors and banking houses
with them.
And once again, we slowly dive into 'Stagflation" - a
phenomenon we haven't seen since Jimmy Carter's disastrously bad
economic policies, in 1977. OR... maybe nothing happens, (just keep
printing money) and everyone agrees the Emperor's New Clothes look
great!
NOW... go back to the '08 financial crisis, which was simply Wall Street making bad bets. Notice which parties supported the 'bailout'; also, Bush's (GOP) reluctance, the Media's scare tactics of a new 'depression' if we didn't bail them out. Says it all.
I agree Steven. We get either runaway inflation and stagnant growth or we begin deafaulting. This is going to be bad whatever way you slice it. The primary cause of the Great Depression was fianancial manipulation by the Federal Reserve. Throughout the '20's the Fed expanded the money supply, causing inflation but also bolstering the economic boom. But they reduced the supply in '29 to counteract the effects of the stock market crash (which would have been a simple correction) and Congress (then controlled by the GOP) raised taxes to "pay for" the lost revenue. It was the perfect storm. I have no doubt the Fed will make the same mistake again - or make a new one by keeping interest rates low and costing the U.S. it's credit worthiness. Either way will be catastrophic.
Posted by: Timothy Birdnow at
11:10 AM
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