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Started By
Message
re: Inflation vs Interest rates
Posted on 8/12/24 at 6:49 am to faraway
Posted on 8/12/24 at 6:49 am to faraway
quote:
raising interest rates is nothing but card tricks. the only thing that improves purchasing power is removing "money" from circulation. they may or may not do that but they will never honestly say when they do. And likely never will.
Yep gotta watch that M2.
0
Posted on 8/12/24 at 7:59 am to FreddieMac
quote:
Would that action let inflation run amuck again?
Inflation is going to run amuck regardless of what they do.
122% debt/gdp
7% deficit/gdp
True interest expense (entitlements+interest) is about 100% of tax receipts
Net international investment position= negative 80%
Debt service>defense=empire no longer (Ferguson's Law)
There is only one line item that is politically feasible to cut, interest, what happens to inflation when they are forced to do that?
Posted on 8/12/24 at 8:18 am to FreddieMac
Inflation is the loss of value of money relative to other goods.
This can happen a few ways, but usually it’s about the supply of money growing.
The supply of money can grow lots of different ways. These are by government spending, Fed spending, or lowering interest rates such that banks and individuals are spending, or by printing more money.
Printing money is pretty self explanatory in how it increases money supply. Government/ bank spending increases money supply by taking money out of gov’t/ banks’ accounts and putting it into the market while taking goods out of the market.
To combat inflation, the current thought is to reduce supply of money or at least restrict its growth relative to other goods. One of these methods is to raise interest rates. The problem is that it’s just one of the “tools” used. If the government is still spending obscene amounts of money, then how much good is raising rates going to do?
This can happen a few ways, but usually it’s about the supply of money growing.
The supply of money can grow lots of different ways. These are by government spending, Fed spending, or lowering interest rates such that banks and individuals are spending, or by printing more money.
Printing money is pretty self explanatory in how it increases money supply. Government/ bank spending increases money supply by taking money out of gov’t/ banks’ accounts and putting it into the market while taking goods out of the market.
To combat inflation, the current thought is to reduce supply of money or at least restrict its growth relative to other goods. One of these methods is to raise interest rates. The problem is that it’s just one of the “tools” used. If the government is still spending obscene amounts of money, then how much good is raising rates going to do?
This post was edited on 8/12/24 at 8:20 am
Posted on 8/12/24 at 3:32 pm to AllbyMyRelf
Who did Powell have lunch with?
What did Powell say on CNBC?
Will Yellen push for a quarter point cut?
Where does the Atlanta Fed Chair say rates are going?
Will they raise 1/4 or 1/2?
People talk breathlessly by this silly schitt, when what really matters is HOW MUCH MONEY WILL BE PRINTED AND GIVEN AWAY?
Because, THAT’S why we have inflation.
What did Powell say on CNBC?
Will Yellen push for a quarter point cut?
Where does the Atlanta Fed Chair say rates are going?
Will they raise 1/4 or 1/2?
People talk breathlessly by this silly schitt, when what really matters is HOW MUCH MONEY WILL BE PRINTED AND GIVEN AWAY?
Because, THAT’S why we have inflation.
Posted on 8/12/24 at 8:50 pm to KWL85
quote:
Do you know if aggregate reporting for debt includes balances that are paid down to zero? This was asked in another thread, but don't think it was answered.
Sorry I didn't answer this, I had lost track of the thread.
Any of the debt reporting I've seen are only accounts with balances at the end of the reporting period.
Posted on 8/12/24 at 8:53 pm to OccamsStubble
quote:
People talk breathlessly by this silly schitt, when what really matters is HOW MUCH MONEY WILL BE PRINTED AND GIVEN AWAY?
Because, THAT’S why we have inflation.
Somewhat. Consumers also have created tons of extra currency by creating so much debt then only servicing it (servicing costs for carried balances are insane). Consumer debt creation has been responsible for a lot of the GDP growth we've seen since COVID.
Posted on 8/13/24 at 5:45 am to Bard
‘Growth based on added debt’ is like describing heroin as an essential food group.
Posted on 8/13/24 at 8:04 am to FreddieMac
quote:
We have been keeping interest rates high
Uh, interest rates aren't high if you're talking about the Fed rate.
Posted on 8/15/24 at 9:47 am to Bard
quote:
Do you know if aggregate reporting for debt includes balances that are paid down to zero? This was asked in another thread, but don't think it was answered.
Sorry I didn't answer this, I had lost track of the thread.
Any of the debt reporting I've seen are only accounts with balances at the end of the reporting period.
____________
Thanks. This is interesting in that the numbers are skewed by the folks that are paying off their balance monthly. Many are using credit cards for convenience and to accumulate rewards. I know that is what I started doing about 10 years ago. I used to pay with cash and seldom do now. I also seldom use a debit card for fear of being hacked.
Do you know if aggregate reporting for debt includes balances that are paid down to zero? This was asked in another thread, but don't think it was answered.
Sorry I didn't answer this, I had lost track of the thread.
Any of the debt reporting I've seen are only accounts with balances at the end of the reporting period.
____________
Thanks. This is interesting in that the numbers are skewed by the folks that are paying off their balance monthly. Many are using credit cards for convenience and to accumulate rewards. I know that is what I started doing about 10 years ago. I used to pay with cash and seldom do now. I also seldom use a debit card for fear of being hacked.
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