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The federal government needs to roll over about $8T in debt as it comes due over the next three years. Higher interest rates for everyone are guaranteed because Congress cannot find a way to cut spending, and the Treasury will have to borrow additional funds to pay the higher interest on the existing debt. The higher interest rates will result in higher costs to businesses and higher prices for necessities, and as usual the poor will suffer the most.
Inflation has come down, but it'll be difficult to get down to the Fed's 2% target, which is a number they must have pulled out of their, umm, hat. Energy and housing are the two biggest problem areas, and both are due to tight supply, and raising interest rates wont help either. In fact, higher rates are making the housing issue worse, not better.
Inflation has come down, but it'll be difficult to get down to the Fed's 2% target, which is a number they must have pulled out of their, umm, hat. Energy and housing are the two biggest problem areas, and both are due to tight supply, and raising interest rates wont help either. In fact, higher rates are making the housing issue worse, not better.
In a growing, productive economy, inflation should be minimal, and some markets (electronics, transportation) we should see price deflation as technology improves. But today the USA has an economy that favors debt-financed consumption over real growth and productivity.
The Fed’s seemingly arbitrary 2% target for inflation goes all the way back to writings of the great economist John Maynard Keynes, when he opined that a low level of price inflation was desirable because annual small wage increases made the common man feel better about his lot in life. A 2% target also sets a safe threshold to guard against monetary deflation which is inherently destructive to the fractional reserve banking system the Fed operates.
But will it? That's the question. (No way to know of course; it is just a guessing game)
I think it will. Much of the massive cash stores and abatements from the Biden-pump have been absorbed or spent. With sideline cash diminishing Fed action will begin to drive us toward recession. As you know the trick is.......can the Fed. put above target inflationary pressures to bed completely without driving us into recession.
Inflation numbers over the last couple of days have been surprisingly promising.
We simply must get to a point in which employers tell marginal employees demanding more money to pound sand.
I was just quoted $12,000 for an upstairs HVAC for 4 rooms. We paid $8700 for an identical unit for downstairs last year, which is larger. Plus, Trane products are going up 40% again in January, and I assume labor too, according to them and a friend of mine who owns an HVAC business.
Inflation is still worse than ever. We can't keep going on like this. It's just unsustainable.
I was just quoted $12,000 for an upstairs HVAC for 4 rooms. We paid $8700 for an identical unit for downstairs last year, which is larger. Plus, Trane products are going up 40% again in January, and I assume labor too, according to them and a friend of mine who owns an HVAC business.
Inflation is still worse than ever. We can't keep going on like this. It's just unsustainable.
In 2019 the HVAC quote was $6200.
In 2013 I paid around $6,500 for a new HVAC. This summer (different house), I paid $11,000 for a new HVAC. So in my 10 years of experience, that is a 5.4% average annual increase, which is about what inflation is running now.
Of course, your example points out that the bulk of that increase occurred within the past year, which makes sense. From 2013 to 2021, inflation was fairly low.
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