August 27, 2021:
Inflation Raging While The economy Going Off The Cliff
According to Mainstream Media, the raging inflation has NOTHING to do with the collapse in consumer confidence or 1.1% drop in retail sales.
It’s because of Delta! People are concerned enough to bother putting a mask on, but they stopped spending money. 1.1% retail decline in July. The Fed will pump this. Yet the Dow is bouncing up, to end the day green.
It’s a joke and the emperor truly wears no clothes. 36K Dow by Friday. There is no bad news bad enough for a correction. What about valuations and the fed will have to tapper at some time. that machine that prints out the paper money( which inflation is eating up) will break down soon.
The laws of economics is just like the laws of physics, “what goes up, must come down”. The Fed is currently between a rock and a hard place. It cant raise rates to curb inflation because if it does, it will owe more interest to all of the bond holders of the outstanding debt.
If they leave rates where they are or lower them, inflation will continue to rise. Its sure nice to know we have a smart, competent leader at the helm ! The Federal Reserve is keeping interest rates at artificially low rates through their monthly purchases (80 Billion of Treasuries and 40 Billion of Mortgage-Backed Securities).
If and when the FED starts to gradually reduce their monthly purchases, then there should be an increase in interest rates. The FED knows that they are responsible the surge in equities and real estate. The FED also know that equities and real estate will crash without their continued intervention.
How long will this intervention go on. Your guess is as good as mine.
