Inflation Cools Ahead of Fed Meeting

[Ahlevah]

And it worked. Better than any other nation. Had to take action because your "let them eat cake" model wasn't working.

If by “worked” you mean exploding debt, deficits, inflation, bubble asset prices, and rising credit defaults, yeah, it worked. Give me trillions of dollars of funny money and I’ll make it “work,” too.

 

[Ahlevah]

You'll hear no complaints from me.

My only gripe is the future ramifications of goosing the economy with so much deficit spending and how'll we'll deal with our exploding debt. An issue not exclusive to Democrats.

Ray Dalio said the U.S. will likely do what Japan did: 1) continue to spend massive amounts of money it doesn’t have, running large deficits; 2) artificially suppress the rate of interest to keep the cost of debt financing down; 3) have the Fed buy the debt.

Of course, if the Fed is buying the debt it has to issue its own IOUs in the form of dollars. That will tend to undercut the value of the dollar and, thus, the living standards of Americans who don’t own assets and depend on wages or pensions for their support. Seems perfectly reasonable to me. This is what a record gold price and rising yields on the longer end of the Treasury yield curve are telling us. I don’t see evidence that either political party cares to seriously address this problem, the main source of which is the 3/4ths of federal autopilot spending, largely related to entitlements. This debt will serve as a drag on U.S. growth, just as it has in other overly-indebted countries throughout financial history.

Ray Dalio says the Fed has a tough balancing act as the economy faces 'enormous amount of debt'​

MSN

 

[poweRob]

If by “worked” you mean exploding debt, deficits, inflation, bubble asset prices, and rising credit defaults, yeah, it worked. Give me trillions of dollars of funny money and I’ll make it “work,” too.

Insert your excuses here...

 

[dobieg]

Ray Dalio said the U.S. will likely do what Japan did: 1) continue to spend massive amounts of money it doesn’t have, running large deficits; 2) artificially suppress the rate of interest to keep the cost of debt financing down; 3) have the Fed buy the debt.

Of course, if the Fed is buying the debt it has to issue its own IOUs in the form of dollars. That will tend to undercut the value of the dollar and, thus, the living standards of Americans who don’t own assets and depend on wages or pensions for their support. Seems perfectly reasonable to me. This is what a record gold price and rising yields on the longer end of the Treasury yield curve are telling us. I don’t see evidence that either political party cares to seriously address this problem, the main source of which is the 3/4ths of federal autopilot spending, largely related to entitlements. This debt will serve as a drag on U.S. growth, just as it has in other overly-indebted countries throughout financial history.

Ray Dalio says the Fed has a tough balancing act as the economy faces 'enormous amount of debt'​

MSN

.My big portfolio gets bigger. Those in the middle and lower class are the ones who suffer.

 

[Ahlevah]

View attachment 67533289

Insert your excuses here...

In case you forgot, the world economy stopped in 2020. Biden has a $2 trillion deficit with a “booming” economy.

 

[upsideguy]

You'll hear no complaints from me.

My only gripe is the future ramifications of goosing the economy with so much deficit spending and how'll we'll deal with our exploding debt. An issue not exclusive to Democrats.

Should I review your posting history to see if you made the same criticism about the Trump tax cuts of 2017?

 

[poweRob]

In case you forgot, the world economy stopped in 2020.

So? You just implied that it was bad to throw money at it and Trump threw more deficit money at it than Biden. Make up your mind or just grow the balls to say, "I'm fine with republican deficit spending but not democratic deficit spending."

Biden has a $2 trillion deficit with a “booming” economy.

With a deficit smaller than Trump's. Imagine that.

 

[Ahlevah]

With a deficit smaller than Trump's. Imagine that.

Bush, even with his “giveaway to the rich” tax cuts, looked like a runt compared to Obama. His deficits were going down until 2008, and it absolutely exploded to a whole new level in 2009 when Obama came into office. How did that happen? Don’t you think a shitty economy had something to do with it, or are you just a political hack?

The fact is, with or without Trump, the national debt is expected to expand by at least $10 trillion over the next ten years, mainly due to increases in entitlement spending. Even if we doubled tax collections from “greedy corporations” it would barely make a dent in the deficit. Corporate income taxes amount to about 10% of federal tax collections. And if we shook every dime from the pockets of billionaires we could fund less than three years of federal deficits. The real problem is we spend too much!

 

[poweRob]

Bush, even with his “giveaway to the rich” tax cuts, looked like a runt compared to Obama. His deficits were going down until 2008, and it absolutely exploded to a whole new level in 2009 when Obama came into office. How did that happen? Don’t you think a shitty economy had something to do with it, or are you just a political hack?

The fact is, with or without Trump, the national debt is expected to expand by at least $10 trillion over the next ten years, mainly due to increases in entitlement spending. Even if we doubled tax collections from “greedy corporations” it would barely make a dent in the deficit. Corporate income taxes amount to about 10% of federal tax collections. And if we shook every dime from the pockets of billionaires we could fund less than three years of federal deficits. The real problem is we spend too much!

Yet dems spend less. And even then you gripe much louder about dem spending and not the bigger repub spending. In fact, the only time right wingers bitch about repub spending is when it's couched in a, "Well both sides herp derp". It's why I can't take republican serious when bitching about spending.

 

[Ahlevah]

.My big portfolio gets bigger. Those in the middle and lower class are the ones who suffer.

Yeah, they are, but I don’t see the sort of hyperinflation Weimar Germany or Zimbabwe suffered anytime soon. At least under current circumstances, I think the greatest threat is deflation resulting from excessive debt supporting asset bubbles in real estate, private credit, and certain segments of the public equity markets. The M2 money supply, at current levels, will not support households ratcheting up incomes to the point where people could afford these ridiculous home prices. They’ll drop before the Fed prints enough money to give everyone the raises they would need to afford a house now priced at 14 or 15 times income. Unless the federal government assumes a lot more debt to support these bubble prices and the Fed initiates another round of QE, they have to drop, and they are beginning to do just that in many markets.

 

[Ahlevah]

Yet dems spend less. And even then you gripe much louder about dem spending and not the bigger repub spending. In fact, the only time right wingers bitch about repub spending is when it's couched in a, "Well both sides herp derp". It's why I can't take republican serious when bitching about spending.

Spend less? Look at your own chart. Obama made Bush, even with his “tax cut giveaway to the rich,” look like a piker. And once you modify your chart to show Grandpa’s last two years and cumulative four-year debt of $7.77 trillion, it will put Trump’s $5.57 trillion worth of deficits in a whole new light.

 

[Ahlevah]

So? You just implied that it was bad to throw money at it and Trump threw more deficit money at it than Biden.

An argument can be made for Trump’s initial stimulus, because we went almost overnight to 14.8% unemployment. Biden is still spending like we’re stuck in a permanent pandemic.

Make up your mind or just grow the balls to say, "I'm fine with republican deficit spending but not democratic deficit spending."

With a deficit smaller than Trump's. Imagine that.

I have made up my mind. You’re trying to blame a politician you don’t like for signing a bill that responded to an economic shock that resulted from a worldwide pandemic. Did you support the spending or not? If you did, you’re being disingenuous if you’re now arguing it was bad because Trump did it. I, on the other hand, just pointed out that you could make the same argument for another politician presumably more to your liking when he also signed legislation supporting federal stimulus spending.

 

[poweRob]

Spend less? Look at your own chart. Obama made Bush, even with his “tax cut giveaway to the rich,” look like a piker. And once you modify your chart to show Grandpa’s last two years and cumulative four-year debt of $7.77 trillion, it will put Trump’s $5.57 trillion worth of deficits in a whole new light.

Can't turn a republican dumpster fire around on a dime. But the Dems have and got it going in the right direction.

 

[poweRob]

An argument can be made for Trump’s initial stimulus, because we went almost overnight to 14.8% unemployment. Biden is still spending like we’re stuck in a permanent pandemic.



I have made up my mind. You’re trying to blame a politician you don’t like for signing a bill that responded to an economic shock that resulted from a worldwide pandemic. Did you support the spending or not? If you did, you’re being disingenuous if you’re now arguing it was bad because Trump did it. I, on the other hand, just pointed out that you could make the same argument for another politician presumably more to your liking when he also signed legislation supporting federal stimulus spending.

Projection

 

[beefheart]

 

[Ahlevah]

There’s still time. A lot can happen in four months.

 

[Ahlevah]

Can't turn a republican dumpster fire around on a dime. But the Dems have and got it going in the right direction.

Democrats want a “wealth tax” and to tax phantom, unrealized “profits.” They’re nuts. Every other word out of their mouth is “tax,” while they never look at the real problem, which is entitlement spending. They mug any Republican who brings up the subject.

So I want to puke whenever I hear anyone assert that Democrats are the party of fiscal responsibility. “Opportunity Economy” my ass. What Kamala really means is the “Tax and Throw Money at the Problem Economy.” She thinks that by handing home buyers $25,000 she’ll make homes more affordable. Subsidies don’t make things more affordable—just the opposite. And if someone needs one they probably shouldn’t be buying a house. What an idiot.

 

[beefheart]

There’s still time. A lot can happen in four months.

Look at you and cognitive dissonance, you need that, evidently.

 

[Mike1950]

You can see that the MAGAs here just get the economic facts from Fox. Of course Fox is no more truthful about economics than they are about the election being stolen which they confessed to in court while under oath.
Examples of the Fox economic reporting is they never talk about the economic meltdown under Bush or how it adversely affected the budget long after Bush was out of office. Another example is how they never refer to GDP during the Trump years. How can you possibly report on a countries economics without talking about GDP as the main measure. It's ridiculous. Another thing Fox always does is to gloss over the stupidity and impact of Tax cuts while at the same time increasing spending and its impact on the deficit. In fact Fox doesn't talk about the deficit when a Republican is in office. When the MAGAs talk about their partisan take on the economy they omit these things just like Fox does. There are lots more lies and flaws in Fox's economic reporting but these three things always stand out to me when their minions repeat their BS.

 

[Ahlevah]

Look at you and cognitive dissonance, you need that, evidently.

Cognitive dissonance is thinking a single American company is worth more than the entire French or German stock market, or that homes priced at 10 times median household income in an entire state that’s lost one million residents in ten years is somehow normal. Even in America, there aren’t enough millionaires to buy all of these homes in Dreamland.

We’re in the mother of all asset bubbles. When it pops is anyone’s guess. While I haven’t completely pulled the plug on stocks (I recently bought Intel at $18.80, and more shares in oil and tobacco companies), I also own a lot of bonds and T-bills. I’m fine with that—indefinitely. If people snap out of their collective trance and price stocks closer to their historical norm, I’ll do my own investment mix pivot or “recalibration.” Historically, a good time to buy stocks is about 18 months after the first rate cut. That’s after people have concluded that the sky really is falling after the house got torched by the “Big, Bad, Fed Wolf,” and Goldilocks isn’t coming over to sample the porridge and beds.

 

[beefheart]

Cognitive dissonance is thinking a single American company is worth more than the entire French or German stock market, or that homes priced at 10 times median household income in an entire state that’s lost one million residents in ten years is somehow normal. Even in America, there aren’t enough millionaires to buy all of these homes in Dreamland.

We’re in the mother of all asset bubbles. When it pops is anyone’s guess. While I haven’t completely pulled the plug on stocks (I recently bought Intel at $18.80, and more shares in oil and tobacco companies), I also own a lot of bonds and T-bills. I’m fine with that—indefinitely. If people snap out of their collective trance and price stocks closer to their historical norm, I’ll do my own investment mix pivot or “recalibration.” Historically, a good time to buy stocks is about 18 months after the first rate cut. That’s after people have concluded that the sky really is falling after the house got torched by the “Big, Bad, Fed Wolf,” and Goldilocks isn’t coming over to sample the porridge and beds.

My company is up 45% in the last 52 weeks.

Thing is, if the market looks like its going down, I can adjust my 401(k) and IRA and take the profits.

You can't deny that the economy has had a soft landing, not the recession that conservatives were praying for.

 

[poweRob]

Democrats want a “wealth tax”

Yes

and to tax phantom, unrealized “profits.”

If they're phantom, then there nothing to tax. Words matter.

They’re nuts. Every other word out of their mouth is “tax,” while they never look at the real problem, which is entitlement spending.

Nope.

They mug any Republican who brings up the subject.

Because they are earned benefits that you and they try to put down as expendable entitlements.

So I want to puke whenever I hear anyone assert that Democrats are the party of fiscal responsibility.

Puke away. The stats don't lie.

“Opportunity Economy” my ass. What Kamala really means is the “Tax and Throw Money at the Problem Economy.”

And republicans want to cut and kill the economy. It's what they do.

She thinks that by handing home buyers $25,000 she’ll make homes more affordable. Subsidies don’t make things more affordable—just the opposite. And if someone needs one they probably shouldn’t be buying a house. What an idiot.

Fortunatley uythe way things are going, you can just sit in the back seat and continue to throw peanuts while these programs are implemented.

 

[Ahlevah]

Examples of the Fox economic reporting is they never talk about the economic meltdown under Bush or how it adversely affected the budget long after Bush was out of office.

Your political hackery slip is showing. The “economic meltdown under Bush” was driven by the bursting of two Fed-fueled, cheap-money asset bubbles and resulting recessions, the first of which was exacerbated by the terrorist attacks on 9/11. Even so his budget deficits, after rising his first couple of years in office in the initial aftermath of a recession and his tax cuts, showed steady progress until the GFC hit full force with the collapse of Lehman Brothers and the passage of TARP stimulus legislation near the end of his second term.

Another example is how they never refer to GDP during the Trump years. How can you possibly report on a countries economics without talking about GDP as the main measure. It's ridiculous.

Federal spending has been on a tear in recent years, and that is reflected in GDP. What it doesn’t reflect is the massive federal debt that was assumed to create that growth, and that servicing this debt is therefore a claim on future spending and GDP. I mean, hand me $6 trillion for one year and I’ll grow the economy, too. Hand me $7 trillion next year and I’ll grow it even more. But after I acquire $54 trillion in debt by 2034 and spend trillions more servicing it, I make no promises when it comes to growth after that. Sorry.

Just giving people money to spend on “servicing” each other with clicks on Instagram or TikTok or to buy cheap Chinese crap in Temu isn’t “growing” anything—except debt.

Another thing Fox always does is to gloss over the stupidity and impact of Tax cuts while at the same time increasing spending and its impact on the deficit. In fact Fox doesn't talk about the deficit when a Republican is in office. When the MAGAs talk about their partisan take on the economy they omit these things just like Fox does. There are lots more lies and flaws in Fox's economic reporting but these three things always stand out to me when their minions repeat their BS.

Stupidity is thinking government subsidies will do anything other than distort the real economy. Taking money from people who own or produce it to hand to others who don’t in an effort to make a good or service, whether it be housing, education, healthcare, food, childcare, transportation, or whatever, more “affordable” is the ultimate indicator of stupidity. A perfect example is Kamala’s plan to give a $25,000 tax credit to first-time home buyers. If people can’t save up enough money to make a down payment on a house, they probably shouldn’t be buying it. And you won’t bring down the cost of houses by increasing demand. It’s basic economics, but then what would anyone expect from a life-long government bureaucrat and politician who never ran an actual business?

 

[Ahlevah]

My company is up 45% in the last 52 weeks.

That’s great. You’re a genius for working at and investing in a company whose stock is appreciating at a fast clip. I invested in a company whose stock is up 25% since I bought it nine days ago. Does that make me smarter than you, or was it really just a question of luck—a measure of fate—due to timing and the level of risk I was willing to assume? I tend to think it was the latter, especially since my broker has this stock rated in the bottom (“F”) quintile for market timeliness. I don’t think that company is necessarily worth 25% more today than it was just a few days ago. But because it’s an investment I intend to hold indefinitely regardless of market conditions, I don’t care if it drops in the short run. I’ll just buy more of it because I have that much faith in it.

Thing is, if the market looks like it’s going down, I can adjust my 401(k) and IRA and take the profits.

Well, it kind of looked like it was “going down” on August 5th when the “fear gauge” (VIX) peaked over 65 and world markets plummeted. Notice that none of the Mag 7 stocks are at new highs. These are supposed to be the market leaders, but they’re not leading.

You can't deny that the economy has had a soft landing, not the recession that conservatives were praying for.

Yeah, I can. This economy has lost about 1.5 million full-time jobs since they peaked in June, 2023. The economic pain these households have felt has been masked by many people taking multiple part-time jobs to bring in income. Auto loan and credit card delinquencies continue to rise. People don’t generally give up their cars unless they’re experiencing significant financial distress. Existing home sales are at a three-decade low and continue to drop:

According to the National Association of Realtors (NAR), existing home sales dropped by 2.5% from July to a seasonally adjusted annual rate of 3.86 million. This marks a 4.2% decline compared to August 2022.

The drop was sharper than expected, with economists predicting an annual rate of 3.9 million, according to FactSet.

U.S. Home Sales Surprise Fall in August Despite Easing Mortgage Rate​

Honestly, man, things aren’t that great, and it’s reflected in opinion polls assessing people’s primary concerns. The economy, by far, is at the top of the list. It’s probably the main reason Trump, even with all of his baggage, is still a gnat Kamala’s trying to swat.

 

[Ahlevah]

If they're phantom, then there nothing to tax. Words matter.

There is no “profit” from an asset until it’s sold and any net increase in value from its sale realized. Taxing profits that don’t exist because it’s based only on what an asset might be worth is taxing a phantom, and a result of the sort of fuzzy logic one would expect from people who’ve never held any position in private industry, like career government bureaucrats and politicians.

Because they are earned benefits that you and they try to put down as expendable entitlements.

Social Security is a giant Ponzi scheme in which entrusted funds, instead of being invested in productive assets for the benefit of beneficiaries like a pension fund would do, are used to pay prior beneficiaries. Excess funds not needed to immediately pay beneficiaries in years past were parked in government IOUs designed to fund the government. If you or I tried to take money people earned and did with it what the government has done we would die in prison like Bernie Madoff did.

At this moment, total off-budget obligations—Social Security, Medicare, Veterans benefits and pensions, etc.—amount to more than $100 trillion. We can fund that by printing more money, but people who worked for wages their entire lives, never saving a dime while still imagining a comfortable retirement thanks to their government benefits, will be the ones who think the dollars they will get will actually be worth something at that point. They’ll probably end up doing what poor people usually do, which is blame rich people and “greedy” corporations for their misery. They never place the blame on the people actually destroying the purchasing power of their money.

Puke away. The stats don't lie.

Yeah, and the stats say this economy continues to slow. Don’t let your hatred of Trump blind you to that fact. I don’t, because I’m focused on trying to protect my assets from stupid politicians.

And republicans want to cut and kill the economy. It's what they do.

No country has ever taxed and spent its way to prosperity. Prosperity comes over time from a net increase in saving and investment, a concept unfamiliar to many top Democratic politicians because they decided to go to law school and become career politicians instead of run a business.

Fortunately the way things are going, you can just sit in the back seat and continue to throw peanuts while these programs are implemented.

I can’t say when THE day of reckoning will come, but it will. It always does.