Fed Chairman, Powell, spoke today. During his talk, the market went up, then down, then back up before finishing down big. For those of you who are retro video game fans, this was the market version of the Konami Code. During his speech, Powell indicated the Fed was done hiking rates for now. As always, … Read more
This piece was originally published on October 12th, 2023. For the past two years, the financial world has focused on the actions of the Federal Reserve, wondering when they’d pause rate hikes or pivot to lower rates. While the Fed has an enormous amount of power, they only control the very short end of the … Read more
This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. Epilogue: There’s no avoiding the fact that US government liabilities are already at a level that can’t be paid, and Congress is going to continue spending us further into bankruptcy (super-bankruptcy?). I want to provide some clarity … Read more
This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. Conclusion: Right now, the Federal Reserve is doing the right thing. Inflation is a long-term problem, and sticky services inflation combined with rising energy prices mean the disinflation story is dead for now. Raising interest rates is … Read more
This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. The Question I Can’t Answer is Timing: I think we can all agree that as we close in on $250 trillion of obligations that this can’t possibly be paid. There is no level of taxation or asset … Read more
This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. How Rate Hikes Can Be Inflationary and Why It’s Different This Time: What we’ve shown above is how overspending leads to inflation, and that the US government has no plans to curtail spending. For now, that includes … Read more
This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. Uncontrollable Spending Leads to an Unsolvable Problem: There are three huge parts to the US Government’s budget. Right now, there is no appetite to cut military spending, but that’s going to happen in the future. The remaining … Read more
This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. Introduction: During inflationary times, and especially when we have high employment and growing GDP, the Federal Reserve raises interest rates to reduce inflation. Raising interest rates is a crude tool, but historically, an effective one. Now, some … Read more
This piece was originally published on September 20th, 2023. The Federal Reserve completed their September meeting and as expected, kept the fed funds rate unchanged. The “surprise” was in the dot plot. The dot plot is where each Fed Governor indicates where they expect rates to be at various points in the future. It further … Read more
