INFLATION--FED's cutting rates again...

[ViperHorn]

Chop gets an A (would have been an A+ if he had shown his work).

 

[nashhorn]

Can you say “downward spiral”? Check that - “uncontrollable downward spiral”.

 

[Monahorns]

There is no uncontrollable downward spiral except if your monetary system completely disintegrates due to hyper-inflation. Mises called it the crack up boom when it happened to Weimar Germany

Governments will default on debt at some point. Prices will stabilize at some point due to time preference. Economic growth will happen again once bad investment is eliminated and capital becomes aligned with actual societal demand.

Bad things are going to happen but there is good that will come after it all. Think of withdrawal symptoms from drug addiction. They are painful but necessary and a chance for a great life.

 

[mchammer]

There is no uncontrollable downward spiral except if your monetary system completely disintegrates due to hyper-inflation. Mises called it the crack up boom when it happened to Weimar Germany

Governments will default on debt at some point. Prices will stabilize at some point due to time preference. Economic growth will happen again once bad investment is eliminated and capital becomes aligned with actual societal demand.

Bad things are going to happen but there is good that will come after it all. Think of withdrawal symptoms from drug addiction. They are painful but necessary and a chance for a great life.

High interest rates is the cost of sound money.

 

[nashhorn]

There is no uncontrollable downward spiral

I should have said “uncontrolled” because once our financial weakness reaches a certain level there are too many enemies that will pounce when our weakness becomes overwhelming. Biden is leading us down a rabbit hole we’ve been heading towards for a long time. The destruction of our children is the reinforcement.

 

[Monahorns]

High interest rates is the cost of sound money.

Sometimes. Depends on the rate of savings and the demand for money. It wouldn't ever get to ~0 like it was though.

 

[AC]

High interest rates is the cost of sound money.

This seems to preport that the USD is sound money. It is backed by nothing and central authorities print at will. Not sound money. Sound money has to be scarce. BRICS reserve currency and Bitcoin. That is sound money! Interest rates will keep rising. 2 banks failed this week. Credit Suisse is next! FDIC has under 3% of the deposits they insure, covered by their assets. As more banks fail, this will release the contagen.

 

[AC]

Wages reported 23 months straight of wage losses. Worst in US financial history! -2%+ compared to CPI inflation, which is half of real inflation!

 

[mchammer]

Wages reported 23 months straight of wage losses. Worst in US financial history! -2%+ compared to CPI inflation, which is half of real inflation!

Not true for lower incomes whose wages have exceeded inflation. For higher income folks, they can get CD’s today for 5.5% and beat inflation.

 

[mchammer]

Not true for lower incomes whose wages have exceeded inflation. For higher income folks, they can get CD’s today for 5.5% and beat inflation.

 

[mchammer]

This seems to preport that the USD is sound money. It is backed by nothing and central authorities print at will. Not sound money. Sound money has to be scarce.

High interest rate is the very definition of scarce money.

 

[Monahorns]

Dollars aren't scarce. There are trillions and trillions around the world and being held in banks.

 

[mchammer]

Dollars aren't scarce. There are trillions and trillions around the world and being held in banks.

But if no one is willing to lend it, then by definition it’s scarce in the marketplace.

 

[Facing Addiction]

It's a bloodbath out there today after regulators seized Silicon Valley Bank in the second-biggest bank failure in U.S. history | Not the Bee

 

[Chop]

It's a bloodbath out there today after regulators seized Silicon Valley Bank in the second-biggest bank failure in U.S. history | Not the Bee

This is big bad news. The markets plunged, and there may be more room to drop.

 

[Monahorns]

Oh well. Make bad decisions your company goes away. It is a net positive for the economy.

 

[AC]

Not true for lower incomes whose wages have exceeded inflation. For higher income folks, they can get CD’s today for 5.5% and beat inflation.

Lower income is getting hammered most by inflation!
My drum instructor Tremayne lives close to the poverty line. I buy him food, i cook meat for him on my pit. Tell Tremayne inflation doesn’t affect him. I’ll give you his number! I looked for apt’s for him 10 days ago. $1,100/month for a 1 bedroom apt. In the mid 90’s in this same area. $400 tops for a 1 bedroom.

 

[AC]

But if no one is willing to lend it, then by definition it’s scarce in the marketplace.

Waaat?

 

[mchammer]

Waaat?

If no one is willing to lend it (i.e., part with their money they are holding) at 6% interest rate, then the money is pretty scarce for someone looking to pay interest for it. The interest rate for money is the definition of scarcity of money.

 

[mchammer]

Lower income is getting hammered most by inflation!
My drum instructor Tremayne lives close to the poverty line. I buy him food, i cook meat for him on my pit. Tell Tremayne inflation doesn’t affect him. I’ll give you his number! I looked for apt’s for him 10 days ago. $1,100/month for a 1 bedroom apt. In the mid 90’s in this same area. $400 tops for a 1 bedroom.

 

[AC]

I keep saying MSM is full of **** and you proved it yet again. Jim Cramer on CNBC said SVB was a can’t miss stock tip, 3 weeks ago. Did you load up on SVB?

 

[mb227]

I keep saying MSM is full of **** and you proved it yet again. Jim Cramer on CNBC said SVB was a can’t miss stock tip, 3 weeks ago. Did you load up on SVB?

Nobody in their right mind buys a Cramer pick...they short the hell out of it. There is even a counter-Cramer fund...and it is doing fairly well.

 

[AC]

 

[ViperHorn]

Slow down there, AC. A Ponzi Scheme isn't needed. The basic issue with SVB is the State of California kept letting them finance their debt by continually borrowing to pay the interest on the issued debt. As interest rates rose the carrying cost drained their cash reserves.

They probably will not be the last bank in the swamp that is Silicon Valley that goes under.

 

[mchammer]

 

[mchammer]

I keep saying MSM is full of **** and you proved it yet again. Jim Cramer on CNBC said SVB was a can’t miss stock tip, 3 weeks ago. Did you load up on SVB?

You can’t fix stupid (referring to SVB).

 

[Monahorns]

The SVB bailout will further extend or increase inflation.

Once rich fat cats start whining that they are losing money the government jumps in and steals from the people. Nevermind that rich people are supposed to take on risk in order to facilitate innovation and growth in the economy. Now they get the upside with little downside. They can be good at investing. They can be bad at investing. It doesn't matter. The US government actively works to enrich them at the expense of us.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It. | Ryan McMaken

 

[mchammer]

The SVB bailout will further extend or increase inflation.

Once rich fat cats start whining that they are losing money the government jumps in and steals from the people. Nevermind that rich people are supposed to take on risk in order to facilitate innovation and growth in the economy. Now they get the upside with little downside. They can be good at investing. They can be bad at investing. It doesn't matter. The US government actively works to enrich them at the expense of us.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It. | Ryan McMaken

There was no bank bailout. Stop spreading misinformation.

 

[mb227]

There was no bank bailout. Stop spreading misinformation.

What else do you call it when the government decides to abandon FDIC limits to make customers whole?

 

[mchammer]

What else do you call it when the government decides to abandon FDIC limits to make customers whole?

I would call it very generous to the depositors. This is not the same as what was done to the bank executives and their shareholders, which namely was eliminating the bank and wiping out the shareholders.