This week in Bidenomics: Buckle up for a hard landing

[Counselor706]

The U.S economy muddled through a spate of high inflation, with employment staying strong last year despite inflation rising to a 40-year high. Now, markets are signaling that the muddle is ending and something worse is replacing it.

The Federal Reserve, the markets’ BFF during much of the last decade, is now more like a frenemy. On Sept. 21, the Fed raised interest rates by three-quarters of a percentage point, as expected. It also signaled more aggressive rates hikes ahead.

"The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive or restrictive for longer,” Chair of the Federal Reserve Jerome Powell said on Sept. 21.

Here’s what he means: With inflation still uncomfortably high, the Fed will have to keep cranking interest rates upward. That is raising the odds of a recession, including the likelihood that more people will lose their jobs and suffer the ravages of unemployment.

https://www.yahoo.com/finance/news/...s-buckle-up-for-a-hard-landing-201304138.html

 

[phrodeau]

 

[Chobham]

I wonder how many really understand what that means?

First, the good news. Foreign capital is going to flood in buying up treasury notes. While the rest of the world is paying 0% interest, and some even negative, US treasuries are a virtual gold mine.

Now the bad news. The US taxpayer is going to have to pay the interest rates on those treasuries all the while those same higher interest rates spur a recession. Is it any wonder that the administration wants 87000 more IRS agents? It's not the rich that are going to pay.

Throw in the fact that the current administrations energy policies are a disaster. Economies, all economies, run on energy and all ways have. Human energy, animal energy, coal, oil, gas, makes no difference. You can't transition from one energy source to another without having the replacement readily available and economically sensible. Wind and solar are neither at this point in time.

 

[ll74]

Inflation needed to be cooled off. Interest rates were raised which will lead to the economy retracting.

 

[Chobham]

Inflation needed to be cooled off. Interest rates were raised which will lead to the economy retracting.

No shit Sherlock. As is so often the case it's not the action but the consequences that make the differences.

 

[ll74]

No shit Sherlock. As is so often the case it's not the action but the consequences that make the differences.

The other option is out of control inflation.