Higher rates will definitely sink the economy, much
higher rates will send it off a cliff, more so than
in 2008. I'm not offering a solution, just plain stating
we are f@#$ed no matter what, so we kick the heavy full coke
can. At some point there should be a splash, and
I think things are starting to heat up. See below. -g/ng-
It would be unwise to think unemployment will not rise
sharply should the rates go up a lot. Imagine 1980-1982
type of rates, only with a lot of debt. Housing will tank
into the grave, so will stocks, defaults at all levels
will skyrocket. As for savers, would you like 12% yield
if it is not paid and your money is not returned? -g-
January 27 – Financial Times (Javier Blas and Chris Giles): “Governments across the developing world are stockpiling food staples in an attempt to contain panic buying, inflation and social unrest. But the hoarding is driving agricultural commodity prices even higher. The cost of wheat, the world’s most important staple, reached a fresh two-and-a-half-year high on Thursday, after countries from Algeria to Saudi Arabia announced extraordinary purchases. High food prices have been a contributing factor to the recent wave of social unrest across North Africa and the Middle East. In Algeria earlier this month, young rioters chanted ‘Bring us sugar!’ The cost of the sweetener in the wholesale market is at its highest in 30 years. Earlier this week, Algeria bought 800,000 tonnes of wheat – much more than usual – and Saudi Arabia announced plans to double the size of its wheat stockpile. Bangladesh and Indonesia joined the rush on Thursday, placing extraordinary on rice orders.”
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