Can you tell me how could house prices suffer declines, with money supply growing 15% or 20% a year ?
I think housing will not drop in nominal terms, with exception of some coastal speculative property.
Is it a coincidence, that as soon as some data starts to point to a slowing housing market and anecdotal evidence of some homeowners in trouble, the Fed comes in with dovish talk, M3 is no longer published and gold rockets $100 since the day the number is not published ?
I suspect that the reason the Fed has stopped publishing M3 is that they wanted to increase the rate of money growth from about 8% to mid teens. And i believe that is what they have done.
Looking at most numbers, the economy is on fire, with businesses raising prices across the board, retail sales running about + 8-10% y/y.
Energy complex, steel, retail, financials are all on fire. Even lowly airlines are increasing prices.
It is just a matter of time before we will have significant wage pressure.
Having said all that, this is not a healthy economy, it is all about inflation.
Retail sales increasing 10% is all about higher prices, not higher real purchasing power of the consumer.
Hyperinflation is a much higher probability than last year, because i think that decision has been made to let the dollar go.
Why would the Fed stop at 5%, with inflation running at 10% or higher ? Will the Fed come in and do a surprise , emergency 100 basis points rate hike ? No chance, because they want to keep housing inflated.
Once they start massive monetization of the bond market, hyperinflation will be a certainty. |
