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This is why I support a Constitutional Convention to add a 'Balanced Budget Amendment'. This is what we needed to do yesterday, too.
And a federal tax revenue cap, as a percetnage of the lesser of last year's GDP or the average GDP over the past 5 years. Let's go with 10%. They can implement as many taxes as they like but the second government tax receipts hit the cap, it must cease collecting any further taxes immediately and return any excess that was collected over the cap.
This is why I support a Constitutional Convention to add a 'Balanced Budget Amendment'. This is what we needed to do yesterday, too.
Checks and balances are to keep our own nature in check as much as anything. Good luck getting politicians to give themselves pay cuts and lifetime term limits, much less balanced budget amendments.
The future is debt free currencies issued outside of central bank authority. That's basically what QE is, the start of such a system. Banks buy bonds and suppress interest rates and don't require repayment on the bonds. This will allow government to print as much as they think they need and inflation will be the new tax that transfers wealth more than income taxes. Debt is just a bookkeeping entry. It's really meaningless in the end if held by a central bank. Can we trust our leaders to spend wisely? That's the million dollar question.
Spending in such a manner means government is very inefficient compared to the private sector.
Right now the stock market needs to fall by 50% and stay there. That will destroy the net worth a lot of people are using to drive up house prices... paper gains. Most working class don't have a ton of net worth because they live paycheck to paycheck. Huge increases in asset prices pressure these people the most. It can take the crypto market with it also. None of these asset bubbles have benefited mankind as a whole. They've made things worse. Suck up the excess liquidity.
Either that, or double wages and make these prices the new norm. They just raised our nighttime (2nd and 3rd shifts... 4PM-8AM) shift differential from 70 cents to 2 dollars an hour, effectively a 65 cent pay raise for those of us who work 50% nights. That puts our yearly raise up to 5%. Still not enough, but progress nonetheless. There's rumors of more coming. They don't really have a choice... job openings far exceed available housing in my town... houses under $300K have simply disappeared from the market over the last year.
Gerald Celente says the stock market will crash. But the big problem with that is that he is sometimes a host on Alex Jones' InfoWars. Celente is more for entertainment, like when he gets obscene and calls people names, than he is somebody to take seriously for financial advice. Besides that, Celente is in his 70s and is in tune to the past.
Until the bank will pay you more interest on your money than blue chip stocks will pay you in dividends, the stock market won't crash.
This is why I support a Constitutional Convention to add a 'Balanced Budget Amendment'. This is what we needed to do yesterday, too.
LOL, I would be shocked if so, much as 1 candidate running for Congress this fall says he or she will promise to support doing that. Among them won't be the incumbents for double sure.
Real interest rate = nominal rate minus inflation.
If the Fed raises rates by 0.5%, real interest rates will still be strongly negative, thanks to inflation. Cash is the last place you want to be in such an environment.
The TINA trade is still alive and well. People will still flock to stocks and real estate because cash is such a terrible investment. There Is No Alternative (TINA).
On the topic of government debt: A real interest rate of negative 6% will make government debt even easier to service than it was before. Effectively the government is being paid to borrow money, so I’m not sure what the OP is so worried about. If anyone should be worried, it’s the people on the other side of that trade: people who are buying government debt at negative 6% interest rates. Might want to check your 401k and make sure you’re not invested in that “core bond” fund.
At running 25% structural inflation (does anyone even know, what structural inflation is?) if Fed raises base rate significantly, economy will collapse.
that is close to a 3 year high. This will easily go over 5% and the sky is the limit if the fed keeps raising
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