Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The Fed cannot top the Great Depression....at least let's hope they never do.
Read your history...it would have been a recession only the Fed watched a decline of 30% of the money in circulation and caused a recession to turn into The Great Depression.
There are some parallels. It was believed that the Fed caused the great depression through raising interest rates, which sent a ripple through the world's economy where most of Europe was indebted in $$$ due to WW1.
Today, close to 90% global currency trades involve the dollar, making the dollar more expensive makes it more expensive for other currencies to trade to dollars. 1% rise in the USD knocks around 0.5% off global trade.
the same economic advisors who were so wrong about Trump, now run the economy and all the doom they predicted under Trump has been realized under biden.
Dems are pathological projectionists. they cannot resist telegraphing their punches.
Destroy the foundation of our economy and results are as expected. It is chilling to realize the downstream result of destroying the economy would be a surprise.
Last edited by Kracer; 10-06-2022 at 03:42 PM..
Reason: sp
The problem is not the Fed or Powell, its the Democrat Party who got us into this mess. They pushed through these massive spending bills and caused mass printing just like any African republic. However, with the UN saying to stop the interest rate hikes, there is an ulterior motive behind that, which is not good for any of us.
Our interest rate hikes are harming China more than ourselves. I believe that is why the UN is voicing their concerns now.
Our rates hikes cause China to make less money on their exports to the US and other western nations. I say screw China, I like getting higher interest on my treasury notes.
Our rates hikes cause China to make less money on their exports to the US and other western nations. I say screw China, I like getting higher interest on my treasury notes.
A weaker Yuan would also increase exports from China to the USA.
Remember, China has been officially accused of keeping their currency artificially deflated so they can sell more of their goods.
Of course this issue is rather complex, while exports go up (with a weaker Yuan) other aspects of the economy are hurt.
A weaker Yuan would also increase exports from China to the USA.
Remember, China has been officially accused of keeping their currency artificially deflated so they can improve the compatibility of their goods.
Of course this issue is rather complex, while exports go up (with a weaker Yuan) other aspects of the economy are hurt.
You are right. It does reduce the price of exports. The Chinese central bank has always targeted a Yuan to dollar exchange rate of around 7. When the Yuan weakens beyond that it does have ramifications for their financial system that are worse than a strong Yuan. I think it has to do with domestic confidence in the Yuan and the risk of Chinese people investing outside the Chinese economy which negates the benefit of stronger exports.
Nonetheless, I think this UN request is being made at the behest of China.
You are right. It does reduce the price of exports. The Chinese central bank has always targeted a Yuan to dollar exchange rate of around 7. When the Yuan weakens beyond that it does have ramifications for their financial system that are worse than a strong Yuan. I think it has to do with domestic confidence in the Yuan and the risk of Chinese people investing outside the Chinese economy which negates the benefit of stronger exports.
Nonetheless, I think this UN request is being made at the behest of China.
A higher interest rate will make it more attractive for Chinese lenders to finance US loans (higher ROI). I.e US debt is more attractive than Chinese debt. This is the big implication for China. Maybe there are others I cannot see atm.
A higher interest rate will make it more attractive for Chinese lenders to finance US loans (higher ROI). I.e US debt is more attractive than Chinese debt. This is the big implication for China. Maybe there are others I cannot see atm.
Maybe that is why China is dumping Treasuries. Buy back later at higher interest rates.
There are some parallels. It was believed that the Fed caused the great depression through raising interest rates, which sent a ripple through the world's economy where most of Europe was indebted in $$$ due to WW1.
Today, close to 90% global currency trades involve the dollar, making the dollar more expensive makes it more expensive for other currencies to trade to dollars. 1% rise in the USD knocks around 0.5% off global trade.
We will see what happens, expect a lot of pain.
I have an idea of what to expect as I lived through the Volcker years with double digit interest rates and gas only on designated days. It wasn't pretty....but we made do. And I lived in NYC then so not being able to drive was not a big issue due to NYC's mass transit system. We only took the car out on weekends
Maybe that is why China is dumping Treasuries. Buy back later at higher interest rates.
Officially, it's to stabilize the Yuan.
But with our debt nearing 32 trillion, we're still adding to that debt like crazy, and this war in Ukraine and souring relations with China, maybe they're preparing to be less exposed economically to the USA in case USA defaults, our credit rating gets degraded [again] or we go to war with China over Taiwan.
I think there has been too much free money out there supplied by the government. Paying people NOT to work has consequences.
Sorry I keep hearing this but imho it is plain and simple...
Businesses are price gouging and the government is letting them do it. Why? Covid.
That was the deal.. you don't raise hell during covid because you are losing buckets of money and we will let you make it up when we got back to normal.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
