@derryb said:
And here comes the inflation avalanche. . .
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
@tincup said:
It's been a couple of months since I had stopped at my grocery store deli to pick up a standard two piece chicken dinner/lunch with two sides. Within a year, price went from $4.95 to $5.95 and is now $7.95... don't know if it's temporary or not... but quite a jump. Same trend in other restaurants.
You're making me hungry but you didn't have lunch with TwoSides. I wasn't there
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I’d be real interested to know exactly whose bank accounts are benefiting from all this out of control deficit spending & new debt creation, aside from military contractors & payoffs to foreign regimes.
Nobody’s buying the debt. It’s being monetized by the Fed, and you ain’t seen nothing yet when it comes to inflation.
On top of that, more corporate layoffs are coming. Lots more. Whoohoo!!!
Q: Are You Printing Money? Bernanke: Not Literally
@derryb said:
And here comes the inflation avalanche. . .
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I notice you did not talk about where that $100s of billions comes from. LOL
It comes from the savers (and all others) in the form of higher prices caused by printing that 100s of billions from thin air.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
And here comes the inflation avalanche. . .
You've been talking about it for decades, we be still waiting.
The 9% (what the gov told us) in 2022 was a warm-up pitch.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said: That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I’d be real interested to know exactly whose bank accounts are benefiting from all this.....
If your bank account ain't showing it then you screwed up somewhere along the line.
@derryb said:
And here comes the inflation avalanche. . .
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I notice you did not talk about where that $100s of billions comes from. LOL
It comes from the savers (and all others) in the form of higher prices caused by printing that 100s of billions from thin air.
As long as it ends up in our pocket, we don't care. We are tired of subsiding the spenders for the last 15 years.
@jmski52 said: That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I’d be real interested to know exactly whose bank accounts are benefiting from all this.....
If your bank account ain't showing it then you screwed up somewhere along the line.
Thats the problem with hoarding gutter in the bunker. It pays no interest and no dividends. Doesn't even keep pace with inflation. RGDS!
@derryb said:
And here comes the inflation avalanche. . .
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I notice you did not talk about where that $100s of billions comes from. LOL
It comes from the savers (and all others) in the form of higher prices caused by printing that 100s of billions from thin air.
As long as it ends up in our pocket, we don't care. We are tired of subsiding the spenders for the last 15 years.
Again you can't see the forest because of the trees: Inflation comes out of your pocket as well.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said: That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I’d be real interested to know exactly whose bank accounts are benefiting from all this.....
If your bank account ain't showing it then you screwed up somewhere along the line.
Thats the problem with hoarding gutter in the bunker. It pays no interest and no dividends. Doesn't even keep pace with inflation. RGDS!
It does if you know how to sell the highs and buy the lows. Stop hoarding, start trading.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said: That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I’d be real interested to know exactly whose bank accounts are benefiting from all this.....
If your bank account ain't showing it then you screwed up somewhere along the line.
Thats the problem with hoarding gutter in the bunker. It pays no interest and no dividends. Doesn't even keep pace with inflation. RGDS!
It does if you know how to sell the highs and buy the lows. Stop hoarding, start trading.
I make multiple round trips on the SLV trade every year. THKS!
@derryb said:
And here comes the inflation avalanche. . .
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I notice you did not talk about where that $100s of billions comes from. LOL
It comes from the savers (and all others) in the form of higher prices caused by printing that 100s of billions from thin air.
As long as it ends up in our pocket, we don't care. We are tired of subsiding the spenders for the last 15 years.
Again you can't see the forest because of the trees: Inflation comes out of your pocket as well.
I see it all quite clearly. The interest I gain far exceeds my increased expenses. And my assets benefit as well.
5 years ago when rates were at 0.5% a typical retiree nestegg of $300,000 paid $1500 in interest. With inflation at 2% and expenses of $60,000 per year their increased cost of living was $1200/year. This offset any interest gain and folk were treading water.
So now, with rates at 5% that $300,000 nest egg yields $15,000. And even if expenses increase resulting in $6000-$7000 rise in cost, that retiree still has $8000 more. He pays some tax and still has $6000. That's $500 per month that he spends on dining, travel, getting Fifi's nails trimmed, buying Chinese junk, and maybe even some shiny PMs.
I see it all quite clearly. The interest I gain far exceeds my increased expenses. And my assets benefit as well.
5 years ago when rates were at 0.5% a typical retiree nestegg of $300,000 paid $1500 in interest. With inflation at 2% and expenses of $60,000 per year their increased cost of living was $1200/year. This offset any interest gain and folk were treading water.
So now, with rates at 5% that $300,000 nest egg yields $15,000. And even if expenses increase resulting in $6000-$7000 rise in cost, that retiree still has $8000 more. He pays some tax and still has $6000. That's $500 per month that he spends on dining, travel, getting Fifi's nails trimmed, buying Chinese junk, and maybe even some shiny PMs.
FED begs to disagree. Inflation exceeds your interest gains. You're operating at a net loss. LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I see it all quite clearly. The interest I gain far exceeds my increased expenses. And my assets benefit as well.
5 years ago when rates were at 0.5% a typical retiree nestegg of $300,000 paid $1500 in interest. With inflation at 2% and expenses of $60,000 per year their increased cost of living was $1200/year. This offset any interest gain and folk were treading water.
So now, with rates at 5% that $300,000 nest egg yields $15,000. And even if expenses increase resulting in $6000-$7000 rise in cost, that retiree still has $8000 more. He pays some tax and still has $6000. That's $500 per month that he spends on dining, travel, getting Fifi's nails trimmed, buying Chinese junk, and maybe even some shiny PMs.
FED begs to disagree. Inflation exceeds your interest gains. You're operating at a net loss. LOL
Your graph 100% corroborates my comment. 2% inflation 5 years ago and I went with 10% now while your graph shows 7%. And I'm pretty sure $15000 is more than $7000. Maybe you believe differently?
I would be at a net loss if my expenses were $300k, but they ain't.
Don't know why you are having trouble with relatively simple math. Folk are earning more in interest than the increase in their expenses. Some are earning substantially more, some who haven't lived long enough to amass savings are not. You should certainly be in the former group.
@derryb said:
And here comes the inflation avalanche. . .
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I notice you did not talk about where that $100s of billions comes from. LOL
It comes from the savers (and all others) in the form of higher prices caused by printing that 100s of billions from thin air.
As long as it ends up in our pocket, we don't care. We are tired of subsiding the spenders for the last 15 years.
Again you can't see the forest because of the trees: Inflation comes out of your pocket as well.
I see it all quite clearly. The interest I gain far exceeds my increased expenses. And my assets benefit as well.
5 years ago when rates were at 0.5% a typical retiree nestegg of $300,000 paid $1500 in interest. With inflation at 2% and expenses of $60,000 per year their increased cost of living was $1200/year. This offset any interest gain and folk were treading water.
So now, with rates at 5% that $300,000 nest egg yields $15,000. And even if expenses increase resulting in $6000-$7000 rise in cost, that retiree still has $8000 more. He pays some tax and still has $6000. That's $500 per month that he spends on dining, travel, getting Fifi's nails trimmed, buying Chinese junk, and maybe even some shiny PMs.
You are missing the big picture. Your chosen time frame is starting from historically low interest rates to rates that are not sustainable for any great length of time.
For every retiree earning $1,200 or $15,000 a year in interest, someone out there has to be paying a like amount in interest, and/or that amount of new money has to be created. It works OK when the population is increasing and more people take on debt and that debt service ultimately pays retirees. But with more retirees and fewer working people earning their living, more of that retiree interest income comes from new money creation (which is inflationary). And that inflation eats away at the standard of living. You can't beat the laws of physics. Retirements for the average person are not getting cushier.
The lesson from this is that interest rates likely will not stay much above the rate of inflation.
You could buy bonds now and lock in a rate that is higher than the past few years.
But inflation will probably eat up most or all of the increased interest income.
Dcarr, you study demographics, so you understand that in the next 3-5 years baby boomers will begin to die, and in the next 15 years will be in full motion. Those boomers ( who have benefitted the most of the "printing money out of thin air") will pass on $50-$100 TRILLION to Millenials and Gen X.
Ironically, the boomers parents echoed the same concerns for them in 1980 as home prices rose from $25k to $75k from 1970 to 1980. They saw energy shocks
inflation and global conflicts coupled with a generation that would rather get high and listen to music in the rain a field. They felt no hope for the country and that we were doomed. Instead their kids benefitted like no generation reaped wealth like.none before.
So yeah, it's tough for some, just like it always is, but it's not tough for everyone, and in fact most are doing very well.
Do not underestimate the power of that MASSIVE transfer of wealth over the next 25 years.
@GoldFinger1969 said:
Inflation has nothing to do with debt service. If anything, debt is DEFLATIONARY.
Inflation appears to be running just under 3%. It's not at 2%, but it's not in HSD anymore.
If you are waiting for a 1970's style inflation, you are going to be like the Gold Bugs who kept waiting and waiting and waiting and waiting.....
.
Debt becomes deflationary when the population isn't growing much, and there aren't new people willing to take on new debt. Without a limit on money creation (such as a Gold Standard), a deflation can be delayed and/or averted via money printing.
Look what happened to the typical standards of living during the deflationary period of the Great Depression.
I think we are entering a period of "stagflation", which is higher costs of living and incomes not keeping up with those higher costs. This is the mechanism by which standards of living decline.
@cohodk said:
Dcarr, you study demographics, so you understand that in the next 3-5 years baby boomers will begin to die, and in the next 15 years will be in full motion. Those boomers ( who have benefitted the most of the "printing money out of thin air") will pass on $50-$100 TRILLION to Millenials and Gen X.
Ironically, the boomers parents echoed the same concerns for them in 1980 as home prices rose from $25k to $75k from 1970 to 1980. They saw energy shocks
inflation and global conflicts coupled with a generation that would rather get high and listen to music in the rain a field. They felt no hope for the country and that we were doomed. Instead their kids benefitted like no generation reaped wealth like.none before.
So yeah, it's tough for some, just like it always is, but it's not tough for everyone, and in fact most are doing very well.
Do not underestimate the power of that MASSIVE transfer of wealth over the next 25 years.
Most of the "wealth transfer" is the equity in the family home. Values for family homes have gone up a lot due to inflation. But if you account for inflation, the net average inheritance is not much (if any) greater than it was before.
Reverse mortgages and the like are popular, and they make retirements easier, but leave less in the way of assets to pass on.
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
When the private sector (individuals and/or corporations) is overextended, there is a risk of deflation as loans default, banks decline to lend, and the economy contracts.
In the case of a government borrowing in its own currency, there is of course a risk that the debt will be “monetized” if supply of debt pushes up against limits in demand. In the short term this may not be inflationary, but it will not be deflationary; also, it can’t go on forever without leading to inflation.
(Monetized in quotes because even though economists and lay people use the word freely, the actual process is not particularly well understood.)
@GoldFinger1969 said:
Inflation has nothing to do with debt service.
BS
If anything, debt is DEFLATIONARY.
Printing money to service the US debt is highly inflationary. In fact the true definition of inflation is an increase in the money supply.
The future need for massive money printing so the FED can pay for purchasing the debt that fewer and fewer other parties are buying with money that already exists will bring you inflation like you have never seen it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
Dcarr, you study demographics, so you understand that in the next 3-5 years baby boomers will begin to die, and in the next 15 years will be in full motion. Those boomers ( who have benefitted the most of the "printing money out of thin air") will pass on $50-$100 TRILLION to Millenials and Gen X.
Ironically, the boomers parents echoed the same concerns for them in 1980 as home prices rose from $25k to $75k from 1970 to 1980. They saw energy shocks
inflation and global conflicts coupled with a generation that would rather get high and listen to music in the rain a field. They felt no hope for the country and that we were doomed. Instead their kids benefitted like no generation reaped wealth like.none before.
So yeah, it's tough for some, just like it always is, but it's not tough for everyone, and in fact most are doing very well.
Do not underestimate the power of that MASSIVE transfer of wealth over the next 25 years.
Most of the "wealth transfer" is the equity in the family home. Values for family homes have gone up a lot due to inflation. But if you account for inflation, the net average inheritance is not much (if any) greater than it was before.
Reverse mortgages and the like are popular, and they make retirements easier, but leave less in the way of assets to pass on.
In the next 25 years, $70,000,000,000,000 will be transferred to about 200 million adults....that's $350,000 each.
Some of those 200 million will not get much, many will get a lot!!
@Higashiyama said:
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
Equally important to understand the difference between the FED buying US debt and all others buying US debt, especially since the need for the FED to buy this debt is going to grow exponentially as foreign central banks cease to do so. When the FED buys this debt it has to create (print) new money to do so. When all others buy this debt they do so with dollars that are already in existence. New dollars = higher inflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@Higashiyama said:
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
Equally important to understand the difference between the FED buying US debt and all others buying US debt, especially since the need for the FED to buy this debt is going to grow exponentially as foreign central banks cease to do so. When the FED buys this debt it has to create (print) new money to do so. When all others buy this debt they do so with dollars that are already in existence. New dollars = higher inflation.
If foreign government do not buy US debt, how do they handle their trade surplus?
@Higashiyama said:
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
Equally important to understand the difference between the FED buying US debt and all others buying US debt, especially since the need for the FED to buy this debt is going to grow exponentially as foreign central banks cease to do so. When the FED buys this debt it has to create (print) new money to do so. When all others buy this debt they do so with dollars that are already in existence. New dollars = higher inflation.
If foreign government do not buy US debt, how do they handle their trade surplus?
With all the new ways they are finding of conducting trade without dollars.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
A record $10 Trillion In US Treasuries coming to market In 2024. Someone will need to buy more than $10 trillion in US government bonds in 2024. That is more than one-third of US government debt outstanding. And more than one-third of US GDP.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@Higashiyama said:
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
Equally important to understand the difference between the FED buying US debt and all others buying US debt, especially since the need for the FED to buy this debt is going to grow exponentially as foreign central banks cease to do so. When the FED buys this debt it has to create (print) new money to do so. When all others buy this debt they do so with dollars that are already in existence. New dollars = higher inflation.
If foreign government do not buy US debt, how do they handle their trade surplus?
I’d think these Chinese and others could begin to consume some of what they make. Surely their standard of living could increase if they did. Or they could trade directly with other governments that actually produce things they want/need.
@Crusty said “I’d think these Chinese and others could begin to consume some of what they make.”
I totally agree with this sentiment, though it is surprisingly difficult to transform an export driven economy into one that has a higher (and healthy) level of consumption, especially when finance and capital investment has been so distorted by the communist party.
Here’s a somewhat related question I don’t know the answer to, though someone must have an estimate: how do Chinese holdings of US Treasuries compare to estimates of the real estate and other domestic debt that the Chinese will need to write off over the next 5-10 years!
@Higashiyama said:
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
Equally important to understand the difference between the FED buying US debt and all others buying US debt, especially since the need for the FED to buy this debt is going to grow exponentially as foreign central banks cease to do so. When the FED buys this debt it has to create (print) new money to do so. When all others buy this debt they do so with dollars that are already in existence. New dollars = higher inflation.
If foreign government do not buy US debt, how do they handle their trade surplus?
I’d think these Chinese and others could begin to consume some of what they make. Surely their standard of living could increase if they did. Or they could trade directly with other governments that actually produce things they want/need.
Problem with that is the average person in China is not addicted to cheap materialistic crap like most are here in 'Merica. RGDS!
@derryb said:
A record $10 Trillion In US Treasuries coming to market In 2024. Someone will need to buy more than $10 trillion in US government bonds in 2024. That is more than one-third of US government debt outstanding. And more than one-third of US GDP.
You understand that almost all of that is just going to be rolled over to existing holders, don't you?
No, you probably don't.
There is not $10 Trillion in additional new debt issued. You either know that and wish to foment anger, fear and contempt, or you don't. I'm hoping the latter
@derryb said:
A record $10 Trillion In US Treasuries coming to market In 2024. Someone will need to buy more than $10 trillion in US government bonds in 2024. That is more than one-third of US government debt outstanding. And more than one-third of US GDP.
You understand that almost all of that is just going to be rolled over to existing holders, don't you?
You understand that existing holders of US debt are purchasing less and less, don't you?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
A record $10 Trillion In US Treasuries coming to market In 2024. Someone will need to buy more than $10 trillion in US government bonds in 2024. That is more than one-third of US government debt outstanding. And more than one-third of US GDP.
You understand that almost all of that is just going to be rolled over to existing holders, don't you?
You understand that existing holders of US debt are purchasing less and less, don't you?
Paying foreign govts for trade surpluses with a deteriorating currency in a “race to the bottom” is a dangerous game called currency war, which usually precedes a shooting war. We already have more than enough of those.
Looks like rates are going to have to go higher to entice debt buyers in both the domestic and foreign exchange markets.
This flies in the face of gov.com’s need to suppress rates (by selling more bonds) to finance more war debt and other big welfare spending programs.
Paradoxically, in order to keep interest payments on the burgeoning amount of debt somewhat lower, they have to issue more and more of it.
Powell and Dimon have been careful to shift blame for the coming train wreck, stating that it’s all unsustainable. Ya think?
Q: Are You Printing Money? Bernanke: Not Literally
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Gramps was earning .40 cents an hour back in .15 cent hamburger land. Good thing we be earning north of $40 an hour in 2024. What's a McPuke burger cost these days? $2? I could buy 20+ burgers on an hours pay today while poor old gramps couldn't even purchase 3. RGDS!
1) Gramps was being grossly underpaid when the minimum wage was $1.15/hr.
2) I paid about $8 for a reasonable burger a couple days ago - it had about 4X the meat than a mcd’s burger does, and it was real meat without the pink slime filler.
Your point?
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
1) Gramps was being grossly underpaid when the minimum wage was $1.15/hr.
2) I paid about $8 for a reasonable burger a couple days ago - it had about 4X the meat than a mcd’s burger does, and it was real meat without the pink slime filler.
Your point?
Minimum wage in 1948 was .40 cents and a mkpuke was .15 cents. A mkpuke hamburger today is $2. The Point? Learn some math. THKS!
PS Hows your $22 gutter holding up to the ole inflation? That should be the discussion, not the price of some junk food 76 years ago. Try to focus. LOL
@jmski52 said:
1) Gramps was being grossly underpaid when the minimum wage was $1.15/hr.
2) I paid about $8 for a reasonable burger a couple days ago - it had about 4X the meat than a mcd’s burger does, and it was real meat without the pink slime filler.
@jmski52 said:
1) Gramps was being grossly underpaid when the minimum wage was $1.15/hr.
2) I paid about $8 for a reasonable burger a couple days ago - it had about 4X the meat than a mcd’s burger does, and it was real meat without the pink slime filler.
Your point?
Sounds like reasonable pricing.
Sounds like inflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said:
1) Gramps was being grossly underpaid when the minimum wage was $1.15/hr.
2) I paid about $8 for a reasonable burger a couple days ago - it had about 4X the meat than a mcd’s burger does, and it was real meat without the pink slime filler.
Your point?
Minimum wage in 1948 was .40 cents and a mkpuke was .15 cents. A mkpuke hamburger today is $2. The Point? Learn some math. THKS!
PS Hows your $22 gutter holding up to the ole inflation? That should be the discussion, not the price of some junk food 76 years ago. Try to focus. LOL
You sure got the fever.
Can't stop thinking and posting about silver at every possible opportunity.
PS:
76 years ago the price of silver was about 75 cents per troy oz.
Adjusted for inflation that would be about $9.50 today.
But silver is more than twice that now.
So, using 1948 as a starting point, the price of silver has risen at more than double the pace of official CPI.
So, using 1948 as a starting point, the price of silver has risen at more than double the pace of official CPI.
official CPI? LOL
or the revised official CPI
How many times do they revise it? LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Comments
You've been talking about it for decades, we be still waiting.
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
Knowledge is the enemy of fear
You're making me hungry but you didn't have lunch with TwoSides. I wasn't there
That graph shows $100s of billions in interest payments going into folks' bank and investment accounts and corporate coffers. Finally a Stimulus program savers (who then spend) can appreciate. Whoohoo!!!
I’d be real interested to know exactly whose bank accounts are benefiting from all this out of control deficit spending & new debt creation, aside from military contractors & payoffs to foreign regimes.
Nobody’s buying the debt. It’s being monetized by the Fed, and you ain’t seen nothing yet when it comes to inflation.
On top of that, more corporate layoffs are coming. Lots more. Whoohoo!!!
I knew it would happen.
I notice you did not talk about where that $100s of billions comes from. LOL
It comes from the savers (and all others) in the form of higher prices caused by printing that 100s of billions from thin air.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The 9% (what the gov told us) in 2022 was a warm-up pitch.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If your bank account ain't showing it then you screwed up somewhere along the line.
Knowledge is the enemy of fear
As long as it ends up in our pocket, we don't care. We are tired of subsiding the spenders for the last 15 years.
Knowledge is the enemy of fear
Thats the problem with hoarding gutter in the bunker. It pays no interest and no dividends. Doesn't even keep pace with inflation. RGDS!
Again you can't see the forest because of the trees: Inflation comes out of your pocket as well.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It does if you know how to sell the highs and buy the lows. Stop hoarding, start trading.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I make multiple round trips on the SLV trade every year.
THKS!
I see it all quite clearly. The interest I gain far exceeds my increased expenses. And my assets benefit as well.
5 years ago when rates were at 0.5% a typical retiree nestegg of $300,000 paid $1500 in interest. With inflation at 2% and expenses of $60,000 per year their increased cost of living was $1200/year. This offset any interest gain and folk were treading water.
So now, with rates at 5% that $300,000 nest egg yields $15,000. And even if expenses increase resulting in $6000-$7000 rise in cost, that retiree still has $8000 more. He pays some tax and still has $6000. That's $500 per month that he spends on dining, travel, getting Fifi's nails trimmed, buying Chinese junk, and maybe even some shiny PMs.
Knowledge is the enemy of fear
FED begs to disagree. Inflation exceeds your interest gains. You're operating at a net loss. LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Your graph 100% corroborates my comment. 2% inflation 5 years ago and I went with 10% now while your graph shows 7%. And I'm pretty sure $15000 is more than $7000. Maybe you believe differently?
I would be at a net loss if my expenses were $300k, but they ain't.
Don't know why you are having trouble with relatively simple math. Folk are earning more in interest than the increase in their expenses. Some are earning substantially more, some who haven't lived long enough to amass savings are not. You should certainly be in the former group.
Knowledge is the enemy of fear
You are missing the big picture. Your chosen time frame is starting from historically low interest rates to rates that are not sustainable for any great length of time.
For every retiree earning $1,200 or $15,000 a year in interest, someone out there has to be paying a like amount in interest, and/or that amount of new money has to be created. It works OK when the population is increasing and more people take on debt and that debt service ultimately pays retirees. But with more retirees and fewer working people earning their living, more of that retiree interest income comes from new money creation (which is inflationary). And that inflation eats away at the standard of living. You can't beat the laws of physics. Retirements for the average person are not getting cushier.
The lesson from this is that interest rates likely will not stay much above the rate of inflation.
You could buy bonds now and lock in a rate that is higher than the past few years.
But inflation will probably eat up most or all of the increased interest income.
Dcarr, you study demographics, so you understand that in the next 3-5 years baby boomers will begin to die, and in the next 15 years will be in full motion. Those boomers ( who have benefitted the most of the "printing money out of thin air") will pass on $50-$100 TRILLION to Millenials and Gen X.
Ironically, the boomers parents echoed the same concerns for them in 1980 as home prices rose from $25k to $75k from 1970 to 1980. They saw energy shocks
inflation and global conflicts coupled with a generation that would rather get high and listen to music in the rain a field. They felt no hope for the country and that we were doomed. Instead their kids benefitted like no generation reaped wealth like.none before.
So yeah, it's tough for some, just like it always is, but it's not tough for everyone, and in fact most are doing very well.
Do not underestimate the power of that MASSIVE transfer of wealth over the next 25 years.
Knowledge is the enemy of fear
Inflation has nothing to do with debt service. If anything, debt is DEFLATIONARY.
Inflation appears to be running just under 3%. It's not at 2%, but it's not in HSD anymore.
If you are waiting for a 1970's style inflation, you are going to be like the Gold Bugs who kept waiting and waiting and waiting and waiting.....
.
Debt becomes deflationary when the population isn't growing much, and there aren't new people willing to take on new debt. Without a limit on money creation (such as a Gold Standard), a deflation can be delayed and/or averted via money printing.
Look what happened to the typical standards of living during the deflationary period of the Great Depression.
I think we are entering a period of "stagflation", which is higher costs of living and incomes not keeping up with those higher costs. This is the mechanism by which standards of living decline.
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Most of the "wealth transfer" is the equity in the family home. Values for family homes have gone up a lot due to inflation. But if you account for inflation, the net average inheritance is not much (if any) greater than it was before.
Reverse mortgages and the like are popular, and they make retirements easier, but leave less in the way of assets to pass on.
Regarding debt and deflation, I think you also need to distinguish between private debt and public debt, especially public debt in a currency controlled by the borrowing country.
When the private sector (individuals and/or corporations) is overextended, there is a risk of deflation as loans default, banks decline to lend, and the economy contracts.
In the case of a government borrowing in its own currency, there is of course a risk that the debt will be “monetized” if supply of debt pushes up against limits in demand. In the short term this may not be inflationary, but it will not be deflationary; also, it can’t go on forever without leading to inflation.
(Monetized in quotes because even though economists and lay people use the word freely, the actual process is not particularly well understood.)
BS
Printing money to service the US debt is highly inflationary. In fact the true definition of inflation is an increase in the money supply.
The future need for massive money printing so the FED can pay for purchasing the debt that fewer and fewer other parties are buying with money that already exists will bring you inflation like you have never seen it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In the next 25 years, $70,000,000,000,000 will be transferred to about 200 million adults....that's $350,000 each.
Some of those 200 million will not get much, many will get a lot!!
Knowledge is the enemy of fear
Equally important to understand the difference between the FED buying US debt and all others buying US debt, especially since the need for the FED to buy this debt is going to grow exponentially as foreign central banks cease to do so. When the FED buys this debt it has to create (print) new money to do so. When all others buy this debt they do so with dollars that are already in existence. New dollars = higher inflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If foreign government do not buy US debt, how do they handle their trade surplus?
Knowledge is the enemy of fear
@cohodk asked “If foreign government do not buy US debt, how do they handle their trade surplus?”
By overpaying for buildings and golf courses and such.
Haha...indeed. It's a shame that folk continue to regurgitate the nonsense that I quoted.
Knowledge is the enemy of fear
With all the new ways they are finding of conducting trade without dollars.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
A record $10 Trillion In US Treasuries coming to market In 2024. Someone will need to buy more than $10 trillion in US government bonds in 2024. That is more than one-third of US government debt outstanding. And more than one-third of US GDP.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I’d think these Chinese and others could begin to consume some of what they make. Surely their standard of living could increase if they did. Or they could trade directly with other governments that actually produce things they want/need.
@Crusty said “I’d think these Chinese and others could begin to consume some of what they make.”
I totally agree with this sentiment, though it is surprisingly difficult to transform an export driven economy into one that has a higher (and healthy) level of consumption, especially when finance and capital investment has been so distorted by the communist party.
Here’s a somewhat related question I don’t know the answer to, though someone must have an estimate: how do Chinese holdings of US Treasuries compare to estimates of the real estate and other domestic debt that the Chinese will need to write off over the next 5-10 years!
Problem with that is the average person in China is not addicted to cheap materialistic crap like most are here in 'Merica. RGDS!
You understand that almost all of that is just going to be rolled over to existing holders, don't you?
No, you probably don't.
There is not $10 Trillion in additional new debt issued. You either know that and wish to foment anger, fear and contempt, or you don't. I'm hoping the latter
Knowledge is the enemy of fear
You understand that existing holders of US debt are purchasing less and less, don't you?
Where Have All the Foreign Buyers Gone for U.S. Treasury Debt?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
You understand "We the people" have been buying more and more.
https://theovershoot.co/p/who-has-been-buying-us-treasury-debt
In fact, there are threads on this forum about "we the people" buying US bonds. I believe even you admitted to buying US debt.
Also, foreign govts continue to buy US debt.
Japanese Funds Buy Most US Debt in Half Year, Pressuring Yen https://www.bloomberg.com/news/articles/2023-11-09/japanese-funds-buy-most-us-debt-in-half-year-pressuring-yen
AND, you still apparently don't understand what foreign govts need to do when they have massive trade surpluses with the US.
"WE THE PEOPLE", can continue to fund the follies of Congress and Presidents for years and years.
Knowledge is the enemy of fear
Paying foreign govts for trade surpluses with a deteriorating currency in a “race to the bottom” is a dangerous game called currency war, which usually precedes a shooting war. We already have more than enough of those.
Looks like rates are going to have to go higher to entice debt buyers in both the domestic and foreign exchange markets.
This flies in the face of gov.com’s need to suppress rates (by selling more bonds) to finance more war debt and other big welfare spending programs.
Paradoxically, in order to keep interest payments on the burgeoning amount of debt somewhat lower, they have to issue more and more of it.
Powell and Dimon have been careful to shift blame for the coming train wreck, stating that it’s all unsustainable. Ya think?
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Gramps was earning .40 cents an hour back in .15 cent hamburger land. Good thing we be earning north of $40 an hour in 2024. What's a McPuke burger cost these days? $2? I could buy 20+ burgers on an hours pay today while poor old gramps couldn't even purchase 3. RGDS!
1) Gramps was being grossly underpaid when the minimum wage was $1.15/hr.
2) I paid about $8 for a reasonable burger a couple days ago - it had about 4X the meat than a mcd’s burger does, and it was real meat without the pink slime filler.
Your point?
I knew it would happen.
Minimum wage in 1948 was .40 cents and a mkpuke was .15 cents. A mkpuke hamburger today is $2. The Point? Learn some math.
THKS!
PS Hows your $22 gutter holding up to the ole inflation? That should be the discussion, not the price of some junk food 76 years ago. Try to focus. LOL
Sounds like reasonable pricing.
Knowledge is the enemy of fear
Sounds like inflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
You sure got the fever.
Can't stop thinking and posting about silver at every possible opportunity.
PS:
76 years ago the price of silver was about 75 cents per troy oz.
Adjusted for inflation that would be about $9.50 today.
But silver is more than twice that now.
So, using 1948 as a starting point, the price of silver has risen at more than double the pace of official CPI.
official CPI? LOL
or the revised official CPI
How many times do they revise it? LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
.> @derryb said:
Only thing that lost more value quicker is an opinion.
Knowledge is the enemy of fear
Minimum wage in 1948 was .40 cents and a mkpuke was .15 cents
There was no McDonalds in 1948. Try to get your story straight.
I knew it would happen.
you sure about NO McDonald's in 48?
Not the franchise operation that was run by Ray Kroc, but you got me - the original McDonalds run by the McDonald brothers was around in 1948.
I knew it would happen.
The original "MacDonalds" was opened in 1940.
But it was not a franchise at the time and it was quite different.
The start of the MacDonalds franchise began in 1948 when a second "MacDonalds" opened.
The first instance of the "Golden Arches" was when the second franchise location opened in 1953.
Nat gas prices same as 30 years ago and threatening to take out the Covid low.
Its rough out there.
Knowledge is the enemy of fear