Core US Inflation Rises to 40-Year High, Securing Big Fed Hike
bloomberg.com
bloomberg.com
The student loan forgiveness, if it happens, would total between 440 billion and 600 billion over the next 10 years.
Which one do you think is more responsible for inflation? Which one are more upset about? Who told you to be? Are those people ever going to have student loans? Did they go to college for almost free? What are their material economic interests now? Do you think they care about the next generation? Is a more educated populace going to be good or bad for their political base? Food for thought.
I bought more things with those news(spent $12k vacation and ebikes), I know others purchasing more things due to those news and knowing that things will probably get even more expensive in the future.
This bill doesn't change anything for future generations......and the timing is just awful...we need to take money away and make buying things hard not inject cash into pockets.
Edit: Before anyone attacks me, I voted blue in last election.
US just isn't very bike friendly in general. I mostly want to use the ebike to make my rides longer.
Im glad I live in a place where biking is taken seriously (even if there is plenty of room for improvement in the infrastructure)
“People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”
"We'll fight inflation with inflation causing instruments (more liquidity)!!!" "People don't have enough money; let's print more."
Federal Reserve buys treasuries -> Federal Government hands trillions of borrowed dollars to state and local governments as “Covid relief” -> States spend well beyond their means.
"Don't blame me, I voted for them!"
It's a big ask but people should stop from time to time to remember that the world doesn't begin and end at the tip of their own noses. Let good things happen to people even when that good has no impact on you.
How are you 'getting money back', from a loan in your name being paid off?
Less money in circulation = less spending.
If we disregard that alcoholism is a sickness and will trump all other spending and make you lose every penny, then increasing taxation and removing money from people by raising rates would prevent the alcoholic from buying more booze.
However, the example is silly the macro economics are much more complex with individuals and businesses spanning across many different sectors.
The agglomeration, centralization, and intermediation of everything is not merely "late stage capitalism". Rather it directly follows from the decades-long policy of creating massive amounts of new money, just dumping it into the financial industry, and then writing that action off as "value neutral" while it's anything but. Given the choice between newly created money just continuing to fuel the everything bubble or spending it on specific policies, the latter is at least more deliberate in its effects.
In general, higher interest rates will slow down the economy, which is a great thing for sustainable use of natural resources. If we want to conserve resources, then we need to change our time preference to not use them all as fast as possible! It's nonsensical to give lip service to global warming, and then continue pushing the economy to run as hot as possible with speculative malinvestments enabled by ZIRP.
Freedom wise, long term higher rates encourage distributed ownership of capital rather than centralized financialization. For example an escooter is merely several hundred dollars, but under ZIRP it made sense for investors to (produce and) buy thousands of them to rent out, hoping to create some kind of future revenue stream. Our society is much better off if things, especially simple consumer goods, are under private ownership rather than administered by centralizing companies.
Also great for keeping sustainable business models from getting out-competed by a bunch of dolts with monopoly bucks.
> Freedom wise, long term higher rates encourage distributed ownership of capital rather than centralized financialization. For example an escooter is merely several hundred dollars, but under ZIRP it made sense for investors to buy thousands of them to rent out, to try and create some kind of future revenue stream. Our society is much better off if things, especially consumer goods, are under private ownership rather than leased out by centralizing companies.
I agree. However, many people see this as a bad thing. To continue with the scooter example, say we discover better scooter batteries but they aren't quite economically viable. With centralized ownership you can just financially penalize companies to make them switch. Even if people have to pay more they're at least not directly targeted which makes the change less politically expensive. With distributed ownership you have to enforce against more people, many of them individuals and possibly take enforcement action against them which is more laborious and expensive and runs much more risk of offending people's sensibilities and other backlash.
I'd also point out that centralization is more likely to make destructive sweeping changes. An individual could keep limping along with their old battery with only 30% capacity, just for short trips and whatnot. Whereas a company would be inclined to scrap old scooters much earlier to keep their fleet uniform and ready for the needs of any user.
A better example is the automobile market, where we've already got the distributed-incentives situation. This seems to be getting handled just fine with EV subsidies and "cash for clunkers" (criticism of that program notwithstanding). Perhaps adoption is slower than we want, but there could also be more direct incentives to upgrade if they were needed, or even just higher gas taxes. Operating on the distributed model where individuals are free to judge their own situation seems better than centralizing things so that they can be changed quicker just in case the need arises.
However, why would the Fed want to raise rates? The Fed members are precisely the group who benefit the most from the Cantillion-ization of the economy. The VC folks who fund escooters flops are just later stage effects.
But the banks who makeup the Fed and control 2/3 of the board members benefit a lot from having that printed cash flowing through their coffers. They also get game the markets even further by knowing where and when the fed will change rates. Why would they change?
The party ends for the banksters when the purchasing power completely runs out on their currency. Who knows what happens now.
Usually we have a big war and pandemic/plague at this stage to wipe the slate and provide cover for a currency reboot, but it appears we are fortunately not having that.
Will we get free from the banksters? (Please say yes!)
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Bought in at ~$21 on the very first high CPI print I saw. Then the Fed took 1.5 years to actually make the correct move, during which time it went as low as $15. Sold out when it finally, painfully climbed back up positive because the Fed started reversing course and I lost all hope.
Two weeks later they finally decided to act like Keynesias and started the rate hike. Now it's in the lower $30s. Not killing myself has been difficult.
[1] https://www.usnews.com/news/business/articles/2022-02-18/fed...
> are limited to diversified investments such as mutual funds
which are wrecked by rate hikes plenty. I don't think stock-picking has much to do with this.
Suppose I were a Fed bank president who wanted to profit from advance knowledge of changes to rates.
When I know rates are going to decrease, I buy a growth ETF, like VIGRX, or a tech index like QQQ. Or I buy a bigger house, safe in the knowledge that prices will go up and I can refinance soon at lower rates. And if options are allowed and I want more gains, I buy calls on ETFs like the ones I mentioned.
When I know rates are going to increase, I instead simply get out and hold cash. Or if options are allowed, I buy puts on QQQ, or at least sell calls.
In all of these hypothetical transactions, I have benefited from my advance knowledge of rate changes, without picking a single individual stock.
I can even make an argument that these diversified trades are more reflective of rate changes, since those changes have broad impact across the economy, whereas specific stocks are confounded by all sorts of idiosyncratic things. Using these ETFs, I average out more of the random variables that aren't "interest rates".
So I don't see how this new rule, which bans stock picking by people at the Fed, matters a lot. These people don't regulate specific industries; they set rates. About the only exception I can think of is bank stocks: Maybe the Fed's interactions with specific banks are significant. But apart from that -- this seems good for appearances, but does it actually accomplish much?
For congresspeople on the other hand, or for people in regulatory agencies, I get it. You don't want a regulator siding with one company over another, or, indeed, from being overinvested in whatever sector they're regulating ("Let pharma get profits at all costs! What do I care about opioids?").
But for people at the Fed? It's not a crazy rule, but I also don't think it does much.