This is where we are in the cycle.
We want the Fed to purposely hike rates so fucking high — that is literally destroys Americans and causes rampant unemployment in order to stave off the inflationary pressures that their own policies caused.
And yes, 100 bps tomorrow, in July and thereafter would be better. The sooner the @federalreserve can get to a terminal FF rate and thereafter can begin to ease, the sooner the markets can recover. https://t.co/lFDNvLl3oU
— Bill Ackman (@BillAckman) June 14, 2022
The net result would be — a deflationary vortex of economic dislocation — but the leeway for the Fed to start, at some point, QE part 100 again. This is where it all ends — MOAR QE.
Until we get there, we must first ruin Joe Crabshack and ensure his home is foreclosed. Bill Ackman will sop up his entrails and the cycle will continue until we can print no more.
I traded poorly, down 115bps for the session with a slight bias short into tomorrow.
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QE was stupidity, and never the answer. All QE does is institutes insolvency.
The “medicine” has to be taken. Waiting 14 years only made it worse.
I am sure there will be deflation at some point. And when there is deflation the Fed will most definitely attempt QE again.
But something to ask ourselves: what if the Fed attempts QE and it fails vis a vis a quick return of inflation?
As the emerging markets continue to transition into emerged markets and China and Russia continue to offer alternatives to the US dollar, our capacity to export our fuck ups overseas will dwindle.
I overheard inflation laughing loudly at the rates hikes.
This ain’t 1980 and you ain’t no Paul Volker.
Sanctions prevented war as well as hikes will prevent inflation.
Not that it matters. There’s no way out.
All the gubmints are levered to the hilt. Jacking rates hurts them as much as anyone.
Inflation this time is supply driven, although it will 6-pack the housing industry, which had been the last place to hide.
Coinbase just fired 1,000. Just the beginning.
Exactly, when QE to the moon?
CPI to 20
Approval rating to single digits.
The supply chain started the inflation process but it isn’t the only component anymore. Powell is a career academic type and a small coward; if there were any path forward where he could just do nothing and not get yelled at, he would take it.
But I agree that rate hikes can’t get rid of all of the inflation. They’ll be lucky to ebb us down to +3-4% annually. And that’s plenty to destroy the West since we sold out our manufacturing and raw material sectors and spent the past 20 years building an economy atop PE multiple rich tech companies that let you post pictures of monkeys.
The spark had to come from somewhere eventually. But the root of inflation is excess monetary stimulous and printing. Disinflationary forces were misconceived as being permanent. I’ve never seen such a party for so many years; completely unwound. I think I just said the same thing as you. But it’s important stuff not to misunderstand or be mislead.
If the rate hikes hurt the businesses that supply commodities and other goods then rate hikes could actually cause further supply side inflation.