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The asset bubble is popping. The stock market is a leading indicator often 6 months out. Plus we had negative GDP numbers in the first quarter. The yield curve has inverted. Last 2 times 2006 and 2019. Consumer confidence has been dropping for months.
Lots of things point to trouble ahead. Interest rates likely rising all year are going to push us towards recession. The fed thinks they can thread the needle and avoid that. But its the same fed that got us into this mess. Same fed that thought they could pump all that money into the economy and not cause inflation. Their track record is pretty horrible.
Exactly. The FED got so overconfident and arrogant they could just do QE infinity and inflation would not go up much because they did it in 2009-2014 much less amount and inflation for most things except homes, college education and some forms of health care was very very low. SO they do like 4X the QE thinking inflation is only transitory and state they will continue until full employment is back.
Now they realize they are wrong and have to tighten so much and tank economy with it to get inflation under control.
In reality they should never have done all this QE to begin with and instead let economy and jobs more slowly come back without creating outrageous inflation and asset price bubbles. When will they ever learn.
Same thing regarding what they did in 2010-2014. Creating horribly inflated home prices yet again and continuing with no end in sight.
Remember, this isn't so much of a US problem, as a worldwide problem. Even if the Fed behaved perfectly (subjective as everyone has a different idea of what should be done), we would basically still be in the same position, give or take a few percentage points.
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Remember, this isn't so much of a US problem, as a worldwide problem. Even if the Fed behaved perfectly (subjective as everyone has a different idea of what should be done), we would basically still be in the same position, give or take a few percentage points.
Not so sure on that at least regarding home prices. I mean for crying out loud the FED did everything they could to inflate home prices like 9 years ago as interest rates got lower and lower even as there were record shortage of homes after another that continues today and yet mortgage rates were lower in 2013-2021 and continued to get lower and lower during that time period than they were in even 2009-2010 and even 2011-2012 when home prices were not depressed, but reasonable fair values in 2009-2012. Let that sink in for a moment even as home prices were rising at outrageously fast rates mortgage rates were flat at historical low levels or got even lower and lower punishing responsible savers in favor of those who do not care about drowning in more debt and only care about the flippin monthly payment.
Trump called this spot on in the debates with Biden. Stock market would take big hits, 401k values would plummet, etc. under a tax and spend government led by Biden.
Trump called this spot on in the debates with Biden. Stock market would take big hits, 401k values would plummet, etc. under a tax and spend government led by Biden.
Again, not a US issue, a worldwide issue. There is nothing Trump could have done to bring the US through wars and a pandemic unscathed. You think he could have made us the only country with no problems?
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I kept telling everyone here for years that the Fed is taking all of us to the SLAUGHTERHOUSE. The Fed didn’t fix absolutely anything and they have no clue how to create real economic growth in America. They ONLY know how to create ASSET BUBBLES.
Good Luck!
Exactly. The FED got so overconfident and arrogant they could just do QE infinity and inflation would not go up much because they did it in 2009-2014 much less amount and inflation for most things except homes, college education and some forms of health care was very very low. SO they do like 4X the QE thinking inflation is only transitory and state they will continue until full employment is back.
Now they realize they are wrong and have to tighten so much and tank economy with it to get inflation under control.
In reality they should never have done all this QE to begin with and instead let economy and jobs more slowly come back without creating outrageous inflation and asset price bubbles. When will they ever learn.
Same thing regarding what they did in 2010-2014. Creating horribly inflated home prices yet again and continuing with no end in sight.
And unlike 2009-2014 the current housing prices have put pressure on rental prices and caused people to move out of places like California. Either because they can no longer afford the rents or the cash out of their high priced homes. So now rents are sky high all over.
If the government instead of just keeping rates low should have encouraged massive building of new homes and apartments. The fact there is no thought process to actions taken by the fed and what other areas will be affected gives me no confidence they will do the right thing now.
Remember, this isn't so much of a US problem, as a worldwide problem. Even if the Fed behaved perfectly (subjective as everyone has a different idea of what should be done), we would basically still be in the same position, give or take a few percentage points.
I disagree that everyone has inflation so the fed cannot be blamed.
A big part is most of the biggest economies have been running near zero interest rates for years like us. That has created asset bubbles and shutdowns and re-openings due to the pandemic as well as extra money pumped into various economies just magnified issues that were already there. And we are 24% of the world economy. Our problems become everyone's problems. We simply pumped more money than everyone else so we have more inflation.
How can we trust the fed? Three fed chair persons resigned recently in due to insider trading. Did any get charged like Martha Stewert? No.
I disagree that everyone has inflation so the fed cannot be blamed.
A big part is most of the biggest economies have been running near zero interest rates for years like us. That has created asset bubbles and shutdowns and re-openings due to the pandemic as well as extra money pumped into various economies just magnified issues that were already there. And we are 24% of the world economy. Our problems become everyone's problems.
Yep, and China's covid problems have become our supply chain problems.
One can always say all the "Fed" agencies of the first world countries caused out problems, but if they did something different, then we would have a different set of problems for everyone to complain about. Essentially posters saying THEY know better than the all the economists and such who guide the governments decisions in these things.
I guess I should have said the US problems are not unique.
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And unlike 2009-2014 the current housing prices have put pressure on rental prices and caused people to move out of places like California. Either because they can no longer afford the rents or the cash out of their high priced homes. So now rents are sky high all over.
If the government instead of just keeping rates low should have encouraged massive building of new homes and apartments. The fact there is no thought process to actions taken by the fed and what other areas will be affected gives me no confidence they will do the right thing now.
Exactly. The government was a bunch of buffoons' saying how home prices needed to recover when they in reality did not in 2009-2012 as they were fair valued. They should have encouraged massive building to keep prices stable in 2012 when it became clear there was a shortage of homes. Instead the government cheered on as if it was a recovery when prices started to rise at absurdly fast rates starting late 2012 to early 2013!!
When will the government and society get it through their heads that $110K to $140K for a small starter home in a good neighborhood of a major metro area is not a depressed price, but rather fair value. If the prices of such homes were $60K to $70K, then a skyrocket to $120K would be welcome as $60K to $70K is a depressed price of starter home. Not $110K to $140K. The government and realtors want us to think anything less than $200K is an undervalued price for even a starter condo which is disgusting!! $200K is even pushing it as insanely high price for starter home let alone a condo!! Nevermind the horribly high prices way above $200K for such home today which is exosphere outrageous!! $200K was bad enough already!!
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