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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (47296)	12/22/2021 10:36:27 AM
From: ajtj99	Read Replies (2) \| Respond to of 97563

The 2021 cannabis bubble continues to deflate: The 2021 cannabis bubble continues to deflate. pic.twitter.com/U46JWuSGAY — (((The Daily Shot))) (@SoberLook) December 20, 2021

To: ajtj99 who wrote (47296)	12/22/2021 11:23:51 AM
From: bull_dozer	1 Recommendation Recommended By Lee Lichterman III Respond to of 97563

Why the Fed Can’t Raise Interest Rates How much upside is left, we don’t know… But whatever it is, it is only suited to daredevils and dimwits. Everyone’s Doing It Stocks are only where they are because the Fed has been pumping them up for more than 10 years. And now… it is still lending money at an inflation-adjusted interest rate of about MINUS 6%. But with inflation on the rise, the only sensible thing for the Fed to do is to raise interest rates – which would bring stock prices crashing down. And this is where the very smart investors may be outsmarting themselves. They realize that the Fed faces an “Inflate or Die” choice. It encouraged everyone to borrow. A recent Bloomberg article, for example, told readers that they should emulate the Argentines – borrow as much as possible… and get rid of their cash as quickly as possible. On the pampas, as well as the Great Plains – everyone does it. Households are once again “taking out equity” by borrowing against the inflated value of their homes. Corporations do it – almost doubling their debt since 2007. And who does it most of all? The government! The feds have tripled their debt load since 2007. *And now, so many people have borrowed so much money that the Fed can’t normalize rates – at least, that’s our “Inflate or Die” hypothesis.* Why the Fed Can’t Raise Interest Rates Inflation hurts savers (and thus, hurts the entire economy, which relies on savings to fund expansion). But it helps debtors. Their debts evaporate as the value of the U.S. dollar goes down. Who’s the biggest debtor in the whole world? Right again. The U.S. government. And with inflation running at almost 7% (it is actually much more, if you calculate it honestly), and the federales paying only about 2% on their loans, it means they are gaining about 5% on their outstanding debt. With a total debt of more than $28 trillion, that means they are reducing their obligations by about $1.4 trillion each year, grosso modo. The very smart money is betting that this is too sweet a racket to give up. The Fed suppresses interest rates by buying bonds. As long as the asset-buying goes on, presumably, stocks and bonds get a bid, even as inflation rates go up. The value of the debt goes down. The value of the elite’s stocks and bonds goes up. Everybody’s happy. Well, everybody except the 90% of the population that pays higher consumer prices. What could go wrong? rogueeconomics.com