Yes but back in the 1970s debt was much less - heck only the
wealthy had credit cards. The whole Western based economic
system is now based upon credit and debt - and every marginal
increase in rates will inflect pain. My parents were prime
example - no cash no purchase. Then if you look at the FED -
QT? That wasn't even in the vocabulary back at that time.
The chart I posted below shows a real household income
plunging due to inflation - you can ramp credit for awhile to
sustain but unless rectified it will not end well. Many
families having a difficult time making ends meet (not
splurging) just paying for basics. It's even worse in Europe
- with the energy and currency.
Posted by DigiNomad on 18th of Aug 2022 at 04:45 pm
I think we're in agreement.
It will be interesting to see how things play out in the coming
years with power in Congress shifting yet again. The Fed admitting
while they were doing the last rounds of QE,to include purchasing
assets like HYG, that they were crossing what they considered to be
a bright red line. I expect the unilateral expansion of their
granted authorities to have consequences at some point - probably
starting with some hearings next year. I would like to see the Fed
remain independent, but they crossed a line(s) that make it a
tougher sell going forward.
Yellen jumping straight from the Fed into a highly partisan
cabinet position is not going to help their arguments for remaining
independent.
Yes but back in the
CE presentation I just sat through. The presenter made a ...
Posted by steve on 18th of Aug 2022 at 04:39 pm
Yes but back in the 1970s debt was much less - heck only the wealthy had credit cards. The whole Western based economic system is now based upon credit and debt - and every marginal increase in rates will inflect pain. My parents were prime example - no cash no purchase. Then if you look at the FED - QT? That wasn't even in the vocabulary back at that time. The chart I posted below shows a real household income plunging due to inflation - you can ramp credit for awhile to sustain but unless rectified it will not end well. Many families having a difficult time making ends meet (not splurging) just paying for basics. It's even worse in Europe - with the energy and currency.
I think we're in agreement. It
Posted by DigiNomad on 18th of Aug 2022 at 04:45 pm
I think we're in agreement.
It will be interesting to see how things play out in the coming years with power in Congress shifting yet again. The Fed admitting while they were doing the last rounds of QE,to include purchasing assets like HYG, that they were crossing what they considered to be a bright red line. I expect the unilateral expansion of their granted authorities to have consequences at some point - probably starting with some hearings next year. I would like to see the Fed remain independent, but they crossed a line(s) that make it a tougher sell going forward.
Yellen jumping straight from the Fed into a highly partisan cabinet position is not going to help their arguments for remaining independent.
Honestly, I prefer to look
Posted by arun on 18th of Aug 2022 at 04:50 pm
Honestly, I prefer to look at technicals than question why and what?