Who’s ready for the bottom to fall out?

dmm698
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dmm698 6/14/2022 3:34am
6/14/2022 3:34am Edited Date/Time 6/14/2022 3:34am
TXDirt wrote:
Housing market is showing signs of cooling. New builds in the two fastest growing cities in North Dallas are down 23% from last year.
Because of demand? Or they are just running out of 5000 sq foot plots to put 3,500 sq foot houses where you can smell your neighbors fart?

Serious question - seems like tons of people are still flocking there and paying way over list?

Have family right there just a touch up the 75/121 from you, spent a year or two there back maybe 10-15 years ago. Dunno how you guys live like that with the heat, the traffic, lack of space ect. Do miss the awesome moto tracks in the area though!
early
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early 6/14/2022 6:23am
6/14/2022 6:23am
SCR wrote:
The Fed has no where to run and no tools to fix the situation they put us in along with Congress and the treasury by financing...
The Fed has no where to run and no tools to fix the situation they put us in along with Congress and the treasury by financing the Govt with debt. Congress has to raise taxes or cut spending. Or continue financing with debt until we have runaway inflation which is probably already in progress.

For about 20 years the Fed has artificially kept interest rates low and flooded the system with cheap money and debt so the Govt can spend more than they take in with taxes. Financial assets have got insanely overvalued and a lot of people have made money. But a lot of that debt didn't go toward investing in Companies expansion of goods and services and labor. The US is a massive importer not an exporter like we used to be and our debt to GDP ration was alway about 30 to 60%. After not taking responsibility for the 2008 collapse our debt to GDP quickly went to 100% and today we are at like 130% or something.

Inflation is 8% and in reality higher. What do interest rates need to get to to bring that down.
How does the Govt pay the interest on the debt if rates go up.
Who is going to buy the treasuries that the Fed is tying to offload from their balance sheet and the Treasuring needs to sell to the Fed to finance the Govt ?

What happens to millions of pension funds when the stock market crashes because the Fed raises rates 1 or 2%.

I try to read about this stuff and it gets really complicated when you think about the US dollar is the global currency and we are linked with all the global markets and currencies, the IMF and other central banks.

Its a hell of a mess and I dont know if we are headed for hyper inflation, depression, deflation. Default and a new
digital currency which would be a really really bad thing I think.

All I know for sure is we have been getting ripped off for a long time by the central bank and the Govt has been honest with us about any of it or willing to do anything serious or honest for at least the last 20 years or so.

I hope that people will start getting together locally and find mutual ground to figure out how to clean out our Govt starting with City Councils, state reps and the people we send to Congress. As far as I can figure there is no good reason for these financial disasters every one of them is caused or enabled by the Govt and Central Bank.

Data says that previous gov deficit spending doesn't mean shit right now wrt inflation.




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borg
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borg 6/14/2022 7:29am
6/14/2022 7:29am
There isn't an automatic link between debt and inflation. In the past there have been situations in other smaller countries where the currency loses value because nobody wants to loan them money due to excessive risk so they print it. Instant runaway inflation. We are nowhere near that situation and the actual debt to GDP trigger line is unknown. It used to be assumed that debt over 75% of GDP meant disaster. We have been well beyond that for many years. The danger of nonstop increasing debt is that it eventually swallows up the annual budget pie leaving less money for everything else including safety net programs. Of course eventually the fit will hit the shan when we can no longer sell treasury bonds. I don't want to think about that but it would have been nice if Congress had not worked so hard over the past 40 years or so to put us in this position. And it is Congress that controls revenue and spending. Not the Fed or the President as many people think.
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jetbull721
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jetbull721 6/14/2022 7:30am
6/14/2022 7:30am
Way to cherry pick the one economy (Germany) that's carrying the whole EU. I think the below graph of the European Central Bank's balance sheet explosion from 4.5 trillion euros to 9 trillion in the past 2 years gets the points across of where the inflation is coming from. Central banks in the west have massively grown their balance sheets (printing) recently to fund the explosion in government deficit spending.


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SCR
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SCR 6/14/2022 7:48am
6/14/2022 7:48am
SCR wrote:
The Fed has no where to run and no tools to fix the situation they put us in along with Congress and the treasury by financing...
The Fed has no where to run and no tools to fix the situation they put us in along with Congress and the treasury by financing the Govt with debt. Congress has to raise taxes or cut spending. Or continue financing with debt until we have runaway inflation which is probably already in progress.

For about 20 years the Fed has artificially kept interest rates low and flooded the system with cheap money and debt so the Govt can spend more than they take in with taxes. Financial assets have got insanely overvalued and a lot of people have made money. But a lot of that debt didn't go toward investing in Companies expansion of goods and services and labor. The US is a massive importer not an exporter like we used to be and our debt to GDP ration was alway about 30 to 60%. After not taking responsibility for the 2008 collapse our debt to GDP quickly went to 100% and today we are at like 130% or something.

Inflation is 8% and in reality higher. What do interest rates need to get to to bring that down.
How does the Govt pay the interest on the debt if rates go up.
Who is going to buy the treasuries that the Fed is tying to offload from their balance sheet and the Treasuring needs to sell to the Fed to finance the Govt ?

What happens to millions of pension funds when the stock market crashes because the Fed raises rates 1 or 2%.

I try to read about this stuff and it gets really complicated when you think about the US dollar is the global currency and we are linked with all the global markets and currencies, the IMF and other central banks.

Its a hell of a mess and I dont know if we are headed for hyper inflation, depression, deflation. Default and a new
digital currency which would be a really really bad thing I think.

All I know for sure is we have been getting ripped off for a long time by the central bank and the Govt has been honest with us about any of it or willing to do anything serious or honest for at least the last 20 years or so.

I hope that people will start getting together locally and find mutual ground to figure out how to clean out our Govt starting with City Councils, state reps and the people we send to Congress. As far as I can figure there is no good reason for these financial disasters every one of them is caused or enabled by the Govt and Central Bank.

early wrote:
Data says that previous gov deficit spending doesn't mean shit right now wrt inflation. [img]https://p.vitalmx.com/photos/forums/2022/06/14/555112/s1200_Screenshot_20220614_085400_Chrome.jpg[/img] [img]https://p.vitalmx.com/photos/forums/2022/06/14/555113/s1200_Screenshot_20220614_085718_Chrome.jpg[/img] [img]https://p.vitalmx.com/photos/forums/2022/06/14/555114/s1200_Screenshot_20220614_085855_Chrome.jpg[/img] [img]https://p.vitalmx.com/photos/forums/2022/06/14/555115/s1200_Screenshot_20220614_085948_Chrome.jpg[/img]
Data says that previous gov deficit spending doesn't mean shit right now wrt inflation.




Govt deficit spending and central bank printing means inflation. Trillions in fiat money and trying to reconcile the debt from 2008 with the QE scheme and flood it back into the economy instead of reconciling through default.
It makes me think of the joke about the guy that jumps off the building and says so far so good.
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early
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early 6/14/2022 7:50am
6/14/2022 7:50am
jetbull721 wrote:
Way to cherry pick the one economy (Germany) that's carrying the whole EU. I think the below graph of the European Central Bank's balance sheet explosion...
Way to cherry pick the one economy (Germany) that's carrying the whole EU. I think the below graph of the European Central Bank's balance sheet explosion from 4.5 trillion euros to 9 trillion in the past 2 years gets the points across of where the inflation is coming from. Central banks in the west have massively grown their balance sheets (printing) recently to fund the explosion in government deficit spending.


The point wasn't the past 2 years, it was the 10 years before that when Germany had a much tighter debt to gdp ratio than the US and inflation was about equal in both countries in that time. The inflation we are seeing is a 1-2 punch of money printing and supply shocks, we can stop printing money but the supply shocks are much harder to rectify in this geopolitical environment.
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tuggy450
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tuggy450 6/14/2022 8:52am
6/14/2022 8:52am
jetbull721 wrote:
Way to cherry pick the one economy (Germany) that's carrying the whole EU. I think the below graph of the European Central Bank's balance sheet explosion...
Way to cherry pick the one economy (Germany) that's carrying the whole EU. I think the below graph of the European Central Bank's balance sheet explosion from 4.5 trillion euros to 9 trillion in the past 2 years gets the points across of where the inflation is coming from. Central banks in the west have massively grown their balance sheets (printing) recently to fund the explosion in government deficit spending.


jetbull, now that graph seems to correlate quite differently,

I think that it shows you can always find a set of data, that agrees with a hypothesis. That said I think we need to be careful confusing correlation with causation. At least as far as current inflationary pressures are concerned.

Early, I agree
That video posted by SpyGuy sort of goes through some stuff. Worth a view. Doesn't really go into inflationary pressures so much, but an interesting viewpoint of socioeconomic political change related to expanding debts, world powers, empires etc.

My take is Germany much like the US or any developed country, is reliant upon energy. When supplies are low prices go up and create a inflationary tax, on everything that requires energy, and everything related to human production requires energy.

Unless your country is a net exporter of energy, you are vulnerable to Inflationary pressures caused by supply shortages, Supply and demand. Germany having a high inflation rate, when under the same Inflationary fuel taxes as the rest of the world makes sense.

I would like to see, inflation in Saudi Arabia. Dollars to donuts, I would assume their inflation is less, But since they rely on other goods, and services produced by foreign countries, they are not totally immune. Being a net exporter, brings them a higher income, so all things considered it is a wash for them. much easier to tolerate 8% price increases when your selling your product for almost double what you used to get. Their debt to gdp is actually going down. around 26% compared with the US 133%

I don't think debt to gdp expansion is, much of a factor, a least for now in the US as it relates to inflation.
The graphs seem to show this, but perhaps overlaying those graphs within the same time frame, might show some correlation,
Perhaps there is some delay, not easily seen. In any event, I would think the effect is not the major factor to the present situation. The fuel tax is.
Is there a tipping point? Where Debt to GDP becomes a problem?
Absolutely, Debt is always a problem. unless you believe you are one who won't have to pay it back.

So where does all of this stuff lead you to avoid, say the pitfalls of said economic crisis.
Any ideas? I have some, I try to follow market trends current events. I had some money in oil and gas trusts, up considerably offsetting other loses.
Thinking about metals. I just scrapped an older vehicle, 4900 pounder any guess as to how much I got for it?
I almost fell over.


Falcon
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Falcon 6/14/2022 9:02am
6/14/2022 9:02am Edited Date/Time 6/14/2022 9:03am
I know almost nothing about economics; I've only ever taken one class in it, and that was in high school.

However, it doesn't take a genius to understand that printing $3T and simultaneously wiping out the global supply chain makes the value of the dollars go down and cost of goods go up. Anyone in the government pretending to be surprised by this should get a swift kick in the nuts.
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tuggy450
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tuggy450 6/14/2022 9:19am
6/14/2022 9:19am Edited Date/Time 6/14/2022 9:19am
Swift kick in the nuts, lol true that
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yz133rider
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yz133rider 6/14/2022 11:11am
6/14/2022 11:11am
“If” you were actively trying to destroy America, and its dollar, what would you do differently?
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nytsmaC
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nytsmaC 6/14/2022 2:11pm
6/14/2022 2:11pm
yz133rider wrote:
“If” you were actively trying to destroy America, and its dollar, what would you do differently?
That’s been my observation as well. This can’t be happening completely unintentionally. Seems like a great way to fast track the “great reset” and a new digital currency while only the nutty conspiracy theorists are paying attention. Seems like maybe we are in the transitional phase and the previous chain of events have led us here, if you don’t believe in coincidences.
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vanillaice782 6/15/2022 7:32pm
6/15/2022 7:32pm Edited Date/Time 6/15/2022 7:40pm
If things get really bad I was hoping to pick up 100 shares each of some solid companies like apple and Disney and then just sell safer covered calls on them if they rebound. Then I guess I'll just retire. Haha, it probably won't be that simple.
vanillaice782 6/15/2022 7:40pm
6/15/2022 7:40pm
yz133rider wrote:
“If” you were actively trying to destroy America, and its dollar, what would you do differently?
That's memeable
5
yz133rider
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yz133rider 6/15/2022 8:18pm
6/15/2022 8:18pm
yz133rider wrote:
“If” you were actively trying to destroy America, and its dollar, what would you do differently?
vanillaice782 wrote:
That's memeable [img]https://p.vitalmx.com/photos/forums/2022/06/15/555392/s1200_Will_You_Shut_Up_Man_15062022213922.jpg[/img]
That's memeable
Lmao that’s great.
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tuggy450
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tuggy450 6/15/2022 8:23pm
6/15/2022 8:23pm
yz133rider wrote:
“If” you were actively trying to destroy America, and its dollar, what would you do differently?
vanillaice782 wrote:
That's memeable [img]https://p.vitalmx.com/photos/forums/2022/06/15/555392/s1200_Will_You_Shut_Up_Man_15062022213922.jpg[/img]
That's memeable
Biden's next CNN town hall, or next presidential debate.
vanillaice782 6/15/2022 9:02pm
6/15/2022 9:02pm
tuggy450 wrote:
Biden's next CNN town hall, or next presidential debate.
I've been saying this for a while, but I know if somebody caught him off guard and asked him what year it is, I bet he would get it wrong.
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Chance1216
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Chance1216 6/15/2022 11:13pm
6/15/2022 11:13pm
tuggy450 wrote:
Biden's next CNN town hall, or next presidential debate.
vanillaice782 wrote:
I've been saying this for a while, but I know if somebody caught him off guard and asked him what year it is, I bet he...
I've been saying this for a while, but I know if somebody caught him off guard and asked him what year it is, I bet he would get it wrong.
Probably go a little like, four score and ,uhhh, uhh, so the hair on my legs are pokey. My neighbors cat comes to visit me every morning and, hmmmm what’s for lunch.
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