Families can not live on their reduced share of the US national income. Corporations and billionaires squeezed the middle class and working class to the point of breaking. Now I expect to see a bounce back in wages. And that will lead to wage-push inflation. And the Fed is in no position to stop it.
Real Estate accounts for 30% of China’s GDP and today it is imploding along with the bonds that supported it. Before the pandemic China had 90 million empty apartments… there will be no more expansion.
One wonders if the Fed would have sat at savings destroying zero percent interest rates for a decade or talk about going negative interest rates if they were suffering from their policies like pension funds and savers. Instead they are trading the tsunami of money printing like leverage hedge fund managers.
August Personal Consumption Expenditures (PCE) inflation rose to 4.3% y-o-y, the largest gain in 30 years. The S&P CoreLogic National Composite Home Price Index posted a 19.7% y-o-y gain in July – the strongest housing inflation in data back to… Read More ›
Stock Market Valuations at peaks. 2000 bubble: 210% of GDP, 2007 bubble: 188% of GDP, today: 332% of GDP
“The U.S. will not allow Mexico to collapse” – 1994. “The West will never allow Russia to collapse” – 1998. “Washington would never tolerate a housing bust” – 2007. “Beijing has everything under control and will do whatever it takes to sustain China’s boom” – 2021.
Forget the rules, this is unethical, corrupt and should be criminal. They should all resign, but this is the world of the top and this is normal to them.
The Federal Reserve helped leverage up the small cap stocks during the pandemic. Now the payback begins.
As is too often the case, conventional thinking is more wishful than wisdom. Inflation is very much alive, and it’s definitely not controlled by central banks. And, importantly, asset inflation and Bubbles pose momentous systemic risk to economic, financial and social stability.
“The people had just begun to jump when we got there,” Perkins later recalled.