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I believe that the Fed wants a recession. The problem with low interest rates is that companies that should not be operating are able to operate, at least in the short run because their discount rate is artificially low. This means that capital is allocated to businesses that would not survive in a "normal" economy. This will eventually free up capital which will lead to innovation and strength, but in the near future, I expect a recession.
The magnitude of the recession is dependent upon what happens in the commodities market, especially in relation to crude. After what seems to be a certain wave of defaults in a credit market that is showing signs of contagion into markets with less risk exposure, it's possible that the inability to maintain current levels of production will result in a shortage.
This is obviously worst case scenario (although things could always be worse, much worse, so I should be less liberal with my choice of words), but it would probably result in a recession of a magnitude which we haven't seen for at least a decade or more.
The fed doesn't want a recession it's absurd to think that's what they want of what their goal is here
The bottom line is that this entire nonsense is due to one thing: We can't pay our bills!!! We are $20 trillion in debt and rising. Somebody is going to have to pay for that debt. OR - we are going to inflate our way out of it with massive inflation. Don't think it can't happen here.
In the long run we are in big trouble. We have promised benefits that can never be paid. There is no longer a base of solid manufacturing / middle class jobs left to support the economy. So what you have got is:
* a 1% class.
* A lot of people on welfare and retired....in other words - 'no longer in the workforce'. Anyone check out those numbers lately?
* a massive class of 'working poor' and illegal immigrants (sorry liberals, I'm not using the politically correct 'undocumented' word.) Think: Wal Mart, fast food workers etc.
* Not enough good jobs for everyone else in the middle
The republican and democrat parties have sold out this country in exchange for getting re-elected.
Big business has sold out this country with it's movement of jobs to other countries. It all started with NAFTA - something Ross Perot warned about more than 20 years ago.
WAKE UP PEOPLE
It will be interesting to see what the market does today.
Happy Thursday.
Last edited by BeerGeek40; 12-17-2015 at 12:40 AM..
The bottom line is that this entire nonsense is due to one thing: We can't pay our bills!!! We are $20 trillion in debt and rising. Somebody is going to have to pay for that debt. OR - we are going to inflate our way out of it with massive inflation. Don't think it can't happen here.
In the long run we are in big trouble. We have promised benefits that can never be paid. There is no longer a base of solid manufacturing / middle class jobs left to support the economy. So what you have got is:
* a 1% class.
* A lot of people on welfare and retired....in other words - 'no longer in the workforce'. Anyone check out those numbers lately?
* a massive class of 'working poor' and illegal immigrants (sorry liberals, I'm not using the politically correct 'undocumented' word.) Think: Wal Mart, fast food workers etc.
* Not enough good jobs for everyone else in the middle
The republican and democrat parties have sold out this country in exchange for getting re-elected.
Big business has sold out this country with it's movement of jobs to other countries. It all started with NAFTA - something Ross Perot warned about more than 20 years ago.
WAKE UP PEOPLE
It will be interesting to see what the market does today.
Happy Thursday.
The bottom line is that this entire nonsense is due to one thing: We can't pay our bills!!! We are $20 trillion in debt and rising. Somebody is going to have to pay for that debt. OR - we are going to inflate our way out of it with massive inflation. Don't think it can't happen here.
In the long run we are in big trouble. We have promised benefits that can never be paid. There is no longer a base of solid manufacturing / middle class jobs left to support the economy. So what you have got is:
* a 1% class.
* A lot of people on welfare and retired....in other words - 'no longer in the workforce'. Anyone check out those numbers lately?
* a massive class of 'working poor' and illegal immigrants (sorry liberals, I'm not using the politically correct 'undocumented' word.) Think: Wal Mart, fast food workers etc.
* Not enough good jobs for everyone else in the middle
The republican and democrat parties have sold out this country in exchange for getting re-elected.
Big business has sold out this country with it's movement of jobs to other countries. It all started with NAFTA - something Ross Perot warned about more than 20 years ago.
WAKE UP PEOPLE
It will be interesting to see what the market does today.
Happy Thursday.
Amen brother!
The fed is certainly not wanting to create a negative effect on the economy. It is a very delicate situation in which we have paper covered the shortcomings and now we are slowly peeling one shred of the paper back to see if a leak springs or not. Serious issues that will take serious years & policies to correct if even possible.
The bottom line is that this entire nonsense is due to one thing: We can't pay our bills!!! We are $20 trillion in debt and rising. Somebody is going to have to pay for that debt. OR - we are going to inflate our way out of it with massive inflation. Don't think it can't happen here.
In the long run we are in big trouble. We have promised benefits that can never be paid. There is no longer a base of solid manufacturing / middle class jobs left to support the economy. So what you have got is:
* a 1% class.
* A lot of people on welfare and retired....in other words - 'no longer in the workforce'. Anyone check out those numbers lately?
* a massive class of 'working poor' and illegal immigrants (sorry liberals, I'm not using the politically correct 'undocumented' word.) Think: Wal Mart, fast food workers etc.
* Not enough good jobs for everyone else in the middle
The republican and democrat parties have sold out this country in exchange for getting re-elected.
Big business has sold out this country with it's movement of jobs to other countries. It all started with NAFTA - something Ross Perot warned about more than 20 years ago.
WAKE UP PEOPLE
It will be interesting to see what the market does today.
Happy Thursday.
What makes you believe we can't pay our debt? We are the number two or three manufacturing leader in the world so its not gone, but a lot of this feels like a lot of over dramatization
Beergeek makes a lot of valid points. Yes we an innovative country and produce a lot but our customers (exports) need to be in a strong financial shape as well to buy our wares.
I believe we are making interest payments only & that is all. How many times is the government going have near shutdowns before we address the deficits?
The effect of the rate hike won't be known until they conduct the reverse repos (RRPs) to bring the market rates up. The effective Fed Funds rate was only 0.15% after yesterday's announcement. The RRPs pull liquidity out of the system by lending securities from the Fed's balance sheet for cash.
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