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as long as the fed prints, everything will go up nominally longer term for sure....
pretty sure that the fed stopped "printing money" at the end of 2021 and has been doing the exact opposite for over a year via the interest rate hikes that started March-2022, with the latest hike announced today.
Correct, they are in quantitative tightening at the tune of 90 billion/month, however that is very small compared to the 4+ trillion covid stimulus, the new "inflation reduction act" passed, and the recent bailout of banks in 2023 (Silicon Valley, etc) which briefly reversed tightening. They are indeed trying to combat inflation with reducing demand by increasing interest rates.
pretty sure that the fed stopped "printing money" at the end of 2021 and has been doing the exact opposite for over a year via the interest rate hikes that started March-2022, with the latest hike announced today.
There is no more QE, but we are currently running $2 trillion annual deficits, that also spike higher as interest rates rise to pay t-bills, and that is pretty much still driving inflation. So even without QE, $2 trillion a year is printed out of thin air.
Fed is backed into a corner. The deficit and debt are so huge, any increase in rates pushes the deficit higher and increases inflation, but they have to raise rates to curb inflation. They waited too long and moved too slow to try to create a soft landing and curry favor with the elected class.
We are coming to a crossroads very soon. Either inflate away the savings and buying power of the middle class and retirees, or drastically slash the budget. Not just a few easy cuts, real actual reductions in ongoing budgets. Since politicians get killed when they cut spending and just want to keep their jobs and power, they will inflate most of us into poverty instead of cutting the budget. We have all lost about 18% of our buying power in the last two years and that includes the buying power of what you had saved. How much you got as a pay and benefit increase has helped ease any blow.
Best part of this thread is that it started in 2017. The government is doing everything in its power to prevent a correction and that means soft inflation not soft landing. Live within your means and buy assets as you can afford. Try to preserve your spending power by being invested in assets that will continue to inflate. Like s2000s, j/k kind of.
Did J-Pow manage to engineer the previously unachievable "soft-landing"???
No, he successfully sharted out the only reasonable result: the ‘K’-shaped recovery.
To Vader1’s point: the folks keeping the economy afloat, both from supply-side and the body politic will (read: are) walking away unscathed.
On the upside, so long as everybody is negative, pissed-off, overly-concerned about the UAW negotiations and the forthcoming real-estate realignment, there’s a magnificent wall of worry with which the new bull is climbing.
And, here's the SPY 3 month chart to reflect on after this was last brought up... slowly approaching the all-time high set almost 2 years ago right before the fed started raising rates and the start of the Ukraine-Russia war. Let's see what the Fed says this week on Dec12/13....
Back at all time market highs... Happy that i'm like 95% invested in the market.
But now the question is - when to get out? When is the next correction? Crystal balls anyone? I don't have a good history of profit taking and re-entering at the right time. I just sell whenever I need to use the money.
Will most likely just sit and get hit with the next correction.
07-19-2023, 11:58 AM
