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About that FED meeting

derrybderryb Posts: 36,015 ✭✭✭✭✭
edited September 22, 2021 6:01PM in Precious Metals

FED FOMC meetings are used to pump investors and calm markets. Today's Wall St. closing bells once again confirm this. A lot of time and investor anxiety could be reduced if the FED just made it simple: "We once again decided to kick the can down the road."

Three take aways from today's meeting:

"Taper" is on track to be announced in Nov. and completed by mid 2022.
Taper is not an end to QE, it is a reduction in QE. Plan is to reduce current QE to a steady stream of $15B a month mid 2022. Of course all of this is still FED "talk" and will change as the economy is constantly changing. More QE will be needed and will be delivered. PMs will benefit.

Committee members are leaning toward higher interest rates.
A forecast of three hikes in both 2023 and 2024, leaving rates at the end of the forecast horizon at 1.75%. LOL. FED can't arguably forecast next quarter's economic condition, let alone that of 2023 and 2024. In three year's interest rates will be where they are today. Real estate will continue to benefit from low rates.

Higher inflation is building due to greater supply side constraints.
Supply chain issues are the driving force of most current, temporary price increases as demonstrated by the recent lumber "shortage." Supply chain issues are short/intermediate term problems and can and will be corrected. Inflation is a short term issue. Prepare for a return to deflation.

"Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

Comments

  • rickoricko Posts: 98,724 ✭✭✭✭✭

    Smoke, mirrors, doublespeak and intangible objectives. Cheers, RickO

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Supply chain issues are short/intermediate term problems and can and will be corrected.

    If China gets a lock on rare earth production and chip production, we haven't yet seen real "supply constraints", and who the h*ll knows what Bill Gates & Evergrande have in mind as the two largest farmland owners in the US.

    Prices have nowhere to go but "up".

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @jmski52 said:
    Supply chain issues are short/intermediate term problems and can and will be corrected.

    If China gets a lock on rare earth production and chip production, we haven't yet seen real "supply constraints", and who the h*ll knows what Bill Gates & Evergrande have in mind as the two largest farmland owners in the US.

    Prices have nowhere to go but "up".

    not during a depression. Isn't that where this is all headed?

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    stagflation, I guess

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • dcarrdcarr Posts: 7,884 ✭✭✭✭✭

    Hyper-Stagflation ;)

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:

    @jmski52 said:
    Supply chain issues are short/intermediate term problems and can and will be corrected.

    If China gets a lock on rare earth production and chip production, we haven't yet seen real "supply constraints", and who the h*ll knows what Bill Gates & Evergrande have in mind as the two largest farmland owners in the US.

    Prices have nowhere to go but "up".

    not during a depression. Isn't that where this is all headed?

    How would the dollar respond? Where is that chart--overlayed on a dollar bill --you show of the dollar losing its value over the last 100 years.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @cohodk said:

    @derryb said:

    @jmski52 said:
    Supply chain issues are short/intermediate term problems and can and will be corrected.

    If China gets a lock on rare earth production and chip production, we haven't yet seen real "supply constraints", and who the h*ll knows what Bill Gates & Evergrande have in mind as the two largest farmland owners in the US.

    Prices have nowhere to go but "up".

    not during a depression. Isn't that where this is all headed?

    How would the dollar respond? Where is that chart--overlayed on a dollar bill --you show of the dollar losing its value over the last 100 years.

    Purchasing power increases during a depression.

    However during the great depression (1929-1941) dollars were hard to come by.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:

    @cohodk said:

    @derryb said:

    @jmski52 said:
    Supply chain issues are short/intermediate term problems and can and will be corrected.

    If China gets a lock on rare earth production and chip production, we haven't yet seen real "supply constraints", and who the h*ll knows what Bill Gates & Evergrande have in mind as the two largest farmland owners in the US.

    Prices have nowhere to go but "up".

    not during a depression. Isn't that where this is all headed?

    How would the dollar respond? Where is that chart--overlayed on a dollar bill --you show of the dollar losing its value over the last 100 years.

    Purchasing power increases during a depression.

    However during the great depression (1929-1941) dollars were hard to come by.

    Yea...dollars get stronger. Shouldnt we want more of them?

    With $20,500,000,000,000 sitting in M2 i dont think dollars are scarce.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @cohodk said:

    With $20,500,000,000,000 sitting in M2 i dont think dollars are scarce.

    At least not to the top 10 percenters.

    However, the 59 million Americans (19% of the population) depending on welfare would strongly disagree with you.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • VanHalenVanHalen Posts: 3,768 ✭✭✭✭✭

    @derryb said:

    @cohodk said:

    With $20,500,000,000,000 sitting in M2 i dont think dollars are scarce.

    At least not to the top 10 percenters.

    However, the 59 million Americans (19% of the population) depending on welfare would strongly disagree with you.

    That 19% are entirely dependent upon "welfare" for their survival. The number "depending on" welfare is much closer to 50%.

  • bigjpstbigjpst Posts: 3,029 ✭✭✭✭✭

    @VanHalen said:

    @derryb said:

    @cohodk said:

    With $20,500,000,000,000 sitting in M2 i dont think dollars are scarce.

    At least not to the top 10 percenters.

    However, the 59 million Americans (19% of the population) depending on welfare would strongly disagree with you.

    That 19% are entirely dependent upon "welfare" for their survival. The number "depending on" welfare is much closer to 50%.

    The word “dependent” is questionable.
    I would believe that 19% is more reasonable as people dependent on welfare. There is a difference between “dependent” and accepting welfare because we’ve made it easy to get and normalized our welfare state.
    There are millions of jobs available and have been for months. We’ve been actively trying to hire for months with virtually no applicants. Since the additional UI benefits have expired we’ve had dozens of applicants. And I work in a skilled trade where wages are enough to support oneself. Free money is a hard thing to turn down.

  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @bigjpst said:

    That 19% are entirely dependent upon "welfare" for their survival. The number "depending on" welfare is much closer to 50%.

    The word “dependent” is questionable.
    I would believe that 19% is more reasonable as people dependent on welfare. There is a difference between “dependent” and accepting welfare because we’ve made it easy to get and normalized our welfare state.
    There are millions of jobs available and have been for months. We’ve been actively trying to hire for months with virtually no applicants. Since the additional UI benefits have expired we’ve had dozens of applicants. And I work in a skilled trade where wages are enough to support oneself. Free money is a hard thing to turn down.

    Unless they are saving that welfare, they are depending on it.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • bigjpstbigjpst Posts: 3,029 ✭✭✭✭✭

    @derryb said:

    @bigjpst said:

    That 19% are entirely dependent upon "welfare" for their survival. The number "depending on" welfare is much closer to 50%.

    The word “dependent” is questionable.
    I would believe that 19% is more reasonable as people dependent on welfare. There is a difference between “dependent” and accepting welfare because we’ve made it easy to get and normalized our welfare state.
    There are millions of jobs available and have been for months. We’ve been actively trying to hire for months with virtually no applicants. Since the additional UI benefits have expired we’ve had dozens of applicants. And I work in a skilled trade where wages are enough to support oneself. Free money is a hard thing to turn down.

    Unless they are saving that welfare, they are depending on it.

    You stated 19% dependent. Other poster stated it was more like 50%. I agree there are probably 19% who actually depend on it. What I don’t believe is that 50% of Americans are dependent on aid. Being dependent IMO means you need it to get by.
    A huge portion of the people who accept aid could do without it. They choose to accept it and could live without it. But see above. Many could not.
    I work with a person who make $35 per hour. Let’s his girlfriend claim welfare for his daughter, food aid, etc. when he files taxes he claims his daughter as a dependent to get child tax credit etc so he pays no federal taxes and gets a substantial refund. He lives with his parents and pays little rent and is saving to buy a house.

    I know another couple who have been living off the additional pandemic UI for most of the last year and a half. Both work under the table paid cash part time. They are doing fine financially based on their spending that I am personally aware of.

    I have many stories that you may call anecdotal similar to this, but sorry I don’t consider him dependent on welfare.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:

    @cohodk said:

    With $20,500,000,000,000 sitting in M2 i dont think dollars are scarce.

    At least not to the top 10 percenters.

    However, the 59 million Americans (19% of the population) depending on welfare would strongly disagree with you.

    So are you saying that $20 trillion should be divvied up to all Americans? Or what would be your solution for those 59 million?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • VanHalenVanHalen Posts: 3,768 ✭✭✭✭✭

    @bigjpst said:

    @derryb said:

    @bigjpst said:

    That 19% are entirely dependent upon "welfare" for their survival. The number "depending on" welfare is much closer to 50%.

    The word “dependent” is questionable.
    I would believe that 19% is more reasonable as people dependent on welfare. There is a difference between “dependent” and accepting welfare because we’ve made it easy to get and normalized our welfare state.
    There are millions of jobs available and have been for months. We’ve been actively trying to hire for months with virtually no applicants. Since the additional UI benefits have expired we’ve had dozens of applicants. And I work in a skilled trade where wages are enough to support oneself. Free money is a hard thing to turn down.

    Unless they are saving that welfare, they are depending on it.

    ....A huge portion of the people who accept aid could do without it. They choose to accept it and could live without it. But see above. Many could not.

    ....I know another couple who have been living off the additional pandemic UI for most of the last year and a half. Both work under the table paid cash part time. They are doing fine financially based on their spending that I am personally aware of.

    I have many stories that you may call anecdotal similar to this, but sorry I don’t consider him dependent on welfare.

    Yes it's semantics. I agree with your examples and have similar examples I could enumerate.

    Around 1/5 of America is entirely dependent on welfare while nearly half use it to their advantage with little actual dependence. So yes, using welfare and being dependent on it are two different things.

  • blitzdudeblitzdude Posts: 5,282 ✭✭✭✭✭

    @cohodk said:

    @derryb said:

    @cohodk said:

    With $20,500,000,000,000 sitting in M2 i dont think dollars are scarce.

    At least not to the top 10 percenters.

    However, the 59 million Americans (19% of the population) depending on welfare would strongly disagree with you.

    So are you saying that $20 trillion should be divvied up to all Americans? Or what would be your solution for those 59 million?

    My calculator broke trying to do the math but I'll take it. Dog coins and gold coins it will immediately be converted to. THKS!

    The whole worlds off its rocker, buy Gold™.

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