Short thread.
Inflation.
The Fed is stuck between a rock and a hard place. Rising rates shrinks multiples which in turn increases pressure on the stock market. Anyone paying attention knows how the Fed will react if there’s a selloff.
Inflation.
The Fed is stuck between a rock and a hard place. Rising rates shrinks multiples which in turn increases pressure on the stock market. Anyone paying attention knows how the Fed will react if there’s a selloff.
Additionally, what it does is it increases the federal governments interest payments on its rapidly growing debt which is now approaching something like $30 trillion.
If inflation sticks around and continues to rise then the bond market could end up in a runaway situation. This would be an actual train wreck. Then systemic leverage would have to be reduced. There wouldnt be a choice.
What that does is it'll lead to rapid, near universal panic among all those highly leveraged traders. Any with immense debt on their balance sheets who would have to unwind. And quick.
The 40 year speculative madhouse of lower & lower rates would then do a 180°. The scale of default will make 2008 look like a happy little picnic.
The long-term inflation we fear and may likely be experiencing is fatal for a highly leveraged global financial system that is already underwater and requires rising credit growth to keep the system from sinking further.
There is a quote about how everyone pays the piper. At this point Im not sure he'll accept anything short of everything.
Be kind to your neighbors.
Be kind to your neighbors.
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