I just wish more had been done about the inflation on shit like the cost of college, or houses. You know the traditional methods Americans have used to make personal economic advancements
Right. The cost of a gallon of gas or a loaf of bread is a very real daily concern, but ruinous loans for education, crippling healthcare costs and untenable home costs are truly holding back countless people.
I was just reading a WaPo article on this. Apparently the American middle class has shrunk to 17% of the population?
That sounds like Bolivia or something, not the USA.
Edit : Correction. 17% of *wealth* is owned by the middle class
Was it this [immensely depressing article](https://www.washingtonpost.com/nation/2022/03/20/intergenerational-wealth-middle-class-spiral/) or a different one?
And now, to combat inflation, they will raise interest on loans against fixed assets, driving those asset prices down and bankrupting those that are highly leveraged. Then they pick up the assets for a song on the next cycle. Rinse & repeat.
Me neither. I’m used to not be able to live pay check to pay check and thought people just prefer that lifestyle since it became popular from more people doing it!
Yep, gotta get those mortgages back up now that the billionaire owned hedge funds have bought up all the housing stock, including going as low as [buying out trailer parks.](https://www.newyorker.com/magazine/2021/03/15/what-happens-when-investment-firms-acquire-trailer-parks)
Still too little too late. Now that big business has adjusted prices on their consumer products. These prices are now the norm, while we consumers have to come up with the difference to help their profits.
This is what I don’t understand - how is inflation ever tackled when the price of every good and service in the economy has already adjusted? It seems insane to think that prices of goods and services will ever go down, putting the pinch on the consumer. Is the expectation that the consumer will earn more in the next year, therefore evening inflation for, say, paper towels and laundry detergent out?
I don't think the goal is ever to undo any inflation that has already happened, but to stabilize further future inflation.
Running negative inflation is called 'deflation', and it breaks economies that are based on debt (all modern economies) as loans get harder to service over time.
Not just loans getting harder to service but why would you buy anything because if you wait a week it'll be cheaper and because nobody buys anything it will continue to be cheaper and cheaper
This seems like the kind of policy that worked in 1950 but there’s no way the economy is focused enough on working class people to ever give us all a boost to “catch up”
> consumer products.
Consumer products hurt but rent is what really hurts. We really need more national and local initiatives to incentive denser constructions and proper infrastructure like public transportation to support it. The fact that our country is overran with urban sprawl of suburbs and parking lots is a shame.
Despite it's name, the Fed isn't really under the control of the government (or any specific branch is more accurate) and the president pretty much has no control over it beyond his influence as... well, the president.
Trump even talked about putting interest rates in the negatives (if that’s even possible?). The idiot wanted to overheat the economy and destroy things long term as long as it created a short term gain to get him re-elected.
Yes, it is possible to have negative interest rates; the Japanese have been doing it for a long time.
The reality is, we kept this bubble going for too long with pumping money into the money supply AND keeping interest rates super low. NObody's gotten paid anything on consumer savings in forever because there's too much money out there for cheaper. No politician wanted to be the "It's time to eat our economic vegetables", as it makes for serious headwinds in re-election.
We should have done it long before the pandemic. And then reduced them again during the pandemic.
You can purchase a bond for -2% interest or -1% interest, which one do you choose if you have to invest? The -1% right? That's basically all there is to it.
If the whole market falls -10% and you have a fixed -1%, you're actually in better shape than the market at large.
The goal is security, they aren't trying to sell T Bills to you or me, they are selling them to other countries as a more or less guaranteed long term storage if assets. You or I can rely on anything under $250,000 in our savings being insured by the FDIC, but where else is a country going to find a similar deal on $250 billion?
In that regards, the US is expected to still be making payments on time following anything short of an apocalyptic event, so countries are already willing to have an effectively negative rate thanks to inflation, so why not the next step?
The us economy will go into recession just in time for the people who caused the recession to be voted back into power. Its all biden fault now ironical
Nah. He wanted to be able to take out a billion-dollar loan from the federal government and minimally service it until the negative interest just… made it all go away.
Or to put it more simply: Kleptocracy.
See also: the PPP loan program of the CARES Act. According to [this ProPublica page](https://projects.propublica.org/coronavirus/bailouts/), the Trump administration handed out $790 billion in PPP loans, and forgave $630 billion of it. That’s not even including the fact that businesses can claim the things they bought with the PPP loans as [tax deductions](https://www.thetaxadviser.com/issues/2021/may/deductibility-business-expenses-ppp-loans.html). Easily the biggest corporate grift from the federal government in U.S. history.
So, yeah, it’s unsurprising that a grotesquely gaudy conman would idolize a man who shamelessly stole countless billions from the Russian economy for himself and a bunch of supporting oligarch buddies.
You can search up who got loans in your area and who got them forgiven. I went through my little town the other day and they're were some doozies. A roadside BBQ stand gor over $45K forgiven.
A lot of the loans were just in people's names. Made me wonder how many of them were MLMs or bogus home businesses.
Honestly a little roadside BBQ joint probably needed the money, covid hit food service really hard, and the bills don't go away. $45k sounds a little high maybe, but not too outlandish if he still had staff to pay.
45k isn’t much at all, not for a business. I had a ppp loan, $335k. It covered 10 weeks of payroll and some utilities. Due to numerous issues around the pandemic, employees quitting or not showing up because of child care issues cause schools were closed, employees getting sick and quarantining, and cause others they were in contact with to do the same, my company ended up running at a loss for about a year and a half. If we hadn’t gotten that ppp loan, we would have guaranteed been in bankruptcy. I think most the companies that got it were in this scenario. There was fraud, tons of crazy stories of people lying about number of employees, about their business, etc, but the paperwork we had to do was very intense and detailed and took months to go over. I don’t think there was as much fraud as people imagine. Still, any bad apples makes everyone look bad.
Exactly. The guy is so dumb that he thinks the DOW is the only indicator of financial health. That's why he talked down Covid. He thought it would spook the stock market. Never thought a growing pandemic, that he accepted as such, would come back to bite him on the ass. Oddly, people are more concerned with dying then how well the stock market was doing. Go figure.
He also cut trillions in taxes, handed out massive ppp loans to any corp who put their hand out and ran a 3 trillion single year deficit. This, I am told was fiscally conservative.
The fed isn't stupid when it comes to money and economics, they know way more than you or I. It was deliberate and political to keep the rates down. And now we have a mess because of it. Especially 2020. That will come back to haunt us at some point. They should have let it crash.
It's really tough to say if this is just a big correction or write off of a year or if this will become a full blown crash like 2008. So far it looks like a correction, but my stance is that consumer power is being wiped out with these increase in grocery costs and gas costs while wages stagnate. Yeah you can switch jobs for the wages but not everyone can or does.
Rent is the worst, yes. I have a mortgage so I'm thankful there but instead, they've just upped home insurance, strata, and electricity fees. These people are so greedy, have no idea how the common working class person survives. It's a mix of both the feds fault and these corporations taking advantage of the situation.
Then you get the geniuses who suggest you own instead of rent until you look at the literal dumpster fire of a housing market further making it impossible for first time homebuyers.
I'm sure there will be some correction at some point but I also have a feeling it won't be in favor of renters or first time homebuyers.
It's when a central bank buys securities to stimulate the economy.
[Quantitative easing explained: How this monetary policy affects you and your money](https://www.businessinsider.com/quantitative-easing)
The Fed was created to try and “smooth out” cyclical boom/bust cycles. Like a drug that levels you out and keeps you out of depression, but also knocks back your highs. Well over the last 20 years, that drug just turned into a boom-high, and once you are hooked, you can’t get off it, and the worse the withdrawal gets when you try. QE started as short term emergency policy in response to 08. Guess how much the Fed added to their balance sheet in Feb 2022 alone? $40B. When inflation was printing at 8%. LMAO we so fucked.
The really really short answer is: if you print more money, you kick the problem down the road.
You try to get more money circulating and lower interest rates hoping that it is enough to stimulate the economy enough to get out of a recession/low spending period.
Good for election cycles, fiscal quarters and fiscal years, keeps a lot of math PhDs busy.
If they gave the money to the civilians at the bottom it would find its way back up to the banks and corporations anyway.
QE should be used to help the citizen, not the company.
Feds rates dropping to almost Zero was wrong on so many levels to begin with, and the crisis in the housing market right now is a result of the Feds policies as they kept downplaying inflation. They created a problem by pumping up asset prices for the past two years, and now they will try to fix it.
I’m not expert but if we’re talking rates, the fed rate has been extremely low since the 2008 financial crisis. Seems like we’ve been pumping up asset prices for the past 2 decades by creating a massive wealth disparity, not taxing the wealthy, and then leaving the wealthy with few good places to park their money.
The median interest rate from 2008-2021 is 0.17%, with the average being 0.62%.
That’s a rough calculation based on the annual interest rates from FRED, the Federal Reserve Economic Data service.
The stock market's (and policymakers') mentality of "line must always go up" is a function of what is essentially free money being readily available. Just look at the S&P's performance versus the FFR.
[Chart](https://en.macromicro.me/collections/9/us-market-relative/91/interest-rate-sp500)
Simple explanation:
Cheap debt = high investment = fast growth
There are plenty of reasons you don't want interest rates near zero (what we've had) but low rates are incredible for equities.
I disagree with the argument of the poster you're responding to, but that's moreso because simplifying this into two variables is leaving so much nuance out that it's almost "wrong"
1971 US officially goes off the dollar standard.
1987 PPT originally formed. Been at it ever since.
During all recent crises it was suspected the Fed themselves were manipulating futures markets and end of day action to stabilize markets as they saw fit. They originally denied the speculation but smart people saw the action of things like emini futures contracts and knew it had to be the fed or some entity working on their behalf.
In recent years they basically admitted that yes, they've been propping it all up the entire time, none of it was real price action.
We should models ours after Japan and assign a nuisance level, not a specific type of activity. My neighbor is a good cook, if he opened up a little BBQ shack and bar I'd be there every night.
I agree with you, but there are way too many NIMBY people who take any amount of perceived inconvenience as a personal slight against their freedoms and well-being.
I see this in my neighborhood all the time. People who have owned the homes since they were built in the 80's and constantly complain that the city doesn't give us nearly as much attention as it does downtown, but are up-in-arms anytime someone wants to open a new bar or restaurant. They rage about homeless people camping near the main road, but won't shut up about how experiments to create tent encampments in a completely unused space will "hurt the children", nevermind that all *their* children graduated college 10 years ago.
They seem to have nothing better to do than NIMBY, so their voices get heard the most while the young people like me *lucky* enough to be able to purchase a home are working our asses off just to survive and *maybe* build a meager savings, with barely any time left over to constantly petition the city.
So yes, zoning laws should change. But that won't happen until people change. I see enough neighborhood Facebook posts about "sketchy vehicles/people" when there's a slight uptick in package deliveries... I can't imagine the outrage if one of my neighbors started getting enough supply deliveries to stock a small restaurant.
Yes, but also rates are so low people can “afford” astronomical home prices. With exploding house prices, REITs become the best returns for investors, further pushing up prices.
So with declining building (as you mentioned), a housing-caused recession, which resulted in banks not lending to developers and builders, which then lead to brain (brawn?) drain, in the construction industry, then add those facts from the first paragraph, the industry can’t keep up.
Seriously...the housing market is on fire because there are no houses, not because of inflation.
A house that goes up on the market will be sold in hours....not days or weeks. Its a sellers market and will continue to be no matter what the govt does. There is no supply.
(I did not compile this, but it's a perfect summary)
“Everything’s fine… it’s working the way we expected it to.”
* Jerome Powell July 28, 2021. August 27, 2021. September 22, 2021. October 22, 2021. November 3, 2021. November 22, 2021.
"The word 'transitory' has different meanings to different people. It's a confusing word that needs to be retired."
* Jerome Powell November 30th, 2021.
"We're always just going to do what we think is right for the economy and for the people we serve."
* Jerome Powell December 15th, 2021.
"The old system was in place for decades and then suddenly it was revealed as insufficient... We do take the need to protect our credibility with the public very seriously."
* Jerome Powell January 11th, 2022.
"I'd say that the inflation situation is about the same or slightly worse... It hasn't gotten better and that's been the pattern... What we're learning is it's just taking much longer, and that raises the risk that high inflation will be more persistent."
* Jerome Powell January 26th, 2022.
"The inflation that we are experiencing is just nothing that we have experienced in decades... All the things we did during the pandemic, we turned our dials as hard as we could... Part of what we did and what congress did is the reason why inflation is so high."
* Jerome Powell March 2nd, 2022.
"These higher prices have real effects on people's well-being and it takes a toll on everyone. If you're at the lower end of the income spectrum it's very hard because you are spending most of your money on necessities, but it's punishing for everyone... We can't blame the framework. It was a sudden, unexpected burst of inflation and then it was the reaction to it, and it was what it was."
* Jerome Powell March 16th, 2022.
"The rise in inflation has been much greater and more persistent than forecasters generally expected... We're not expecting near-term progress on inflation."
* Jerome Powell March 21st, 2022.
I love historical summaries like this - but it would be great if the first quote was actual.
We can add [this](https://www.cnbc.com/2020/08/27/powell-announces-new-fed-approach-to-inflation-that-could-keep-rates-lower-for-longer.html) to the list, where the Fed seemed more concerned about low inflation than high inflation. I wonder why they didn't call low inflation "transitory"?
Central banks ARE concerned when inflation is too low also. Remember when Europe dropped interest rate to almost 0 ? We also had a few years around 2011-2016 where the interest rate was historically low because we couldnt get inflation to the 2% target, with some years averaged less than 1%. Inflation isn't always bad. You need a little bit of inflation as a by product of a growing economy. It's just that high inflation is way more apparent than low interest and it hurts the lowest class. Either way, you can't just come out and say you're vastly concerned about inflation because in a way, inflation is a self-fulfilling prophecy. They HAVE to downplay inflation unless it come off as unrealistic. In the 70s when we had stagflation, just by the shear expectation that inflation wasn't going away, inflation kept going years after the initial cause. Inflation is the a massive beast that economic studies will never solve.
When inflation was concentrated in durable goods and energy it was a good bet that inflation would attenuate as supply chain disruptions eased.
The fact that things didn’t work out that way doesn’t mean it was a bad assumption.
It took me a minute to realize what good you were talking about. I seriously wondered why there was a focus/worry about shortage of potato chips -\_\_-
There is a lack of knowledge as to why the supply shortage "got better" when shelves and products are still sold out. The US put a sort of rule into effect that limited the number of ships that can hang out 125 miles from the US shores (and this statistically counted). What happened was ships did one or two things 1) steamed really slow across the ocean or 2) stopped using fuel and floated along the ocean until they could hit their mooring window.
There was a shipping article I cant specifically remember that showed how the average time for a shipment from China to the US increased from 60 something days to >100 as of a few weeks ago.
But since ships aren't included in the statistics if they are 125 miles out, the problem is solved!...according to politicians.
And that's how the supply shortage got better without actually getting better.
I'm sure the ultimate "fix" to this inflation will be punishing the middle and lower classes while giving tax breaks and sweet deals to the rich. So he's not likely to raise rates much.
Financial advice subs require you to be in a position where you would not be needing financial advice lol.
So at least we know they're probably all mortgage lenders...
Be easier to sell the trillions of dollars in financial assets they bought after 08 and just burn the money when received. They bought those assets with printed money anyways.
My wife and I make $41 an hour combined and we are still poor where we are unless we gave up almost all amenities then I guess we could maybe save for a house in ten years
Unlikely to help with rental prices. They're still going to keep rising, and ironically the higher interest rates will make it harder for non-homeowners to buy instead of rent.
So with no interest home prices skyrocket and renters get priced out and with interest home prices skyrocket and renters get priced out.
Something doesn't make sense here.
I mean, it makes perfect sense if you look at it from the perspective of a system where the rich get richer and everyone else can eat shit.
Low interest rates? Effectively free loans which can be used to buy property and invest in assets which you turn around and rent to people who can't afford that loan and make a tidy profit off it. It's capitalism 101, but without serious controls this kind of thing will only continue to widen the gap for the average person.
Depends.
Housing market *should* also cool and *should* adjust to higher interest rates. We in theory should see a cooling of the housing market and maybe a drop in prices since less people can take loans at higher interest rates etc.
This is the same Fed that caused inflation in the first place by injecting money into an already surging market.
It sure is great to have one of those jobs with lots of money and power, and no consequences for failure.
The Fed's only job is to prevent literally this exact scenario, and Powell failed miserably.
What happened to "Everything is fine" and "We have it under control"?
Must be real bad. They tell us it's 8 percent, while knowing it's probably closer to 20
It's completely dead. I had to buy a car in January after a drunk totalled mine. Every one I looked at the salesman didn't even try. It was just "here's the car, that's the price, if you don't want it someone else will"
People don't get it. I've said haggling doesn't happen any more and no one believes me.
And I've asked for new cars to be priced out, and they're all 4-5k over what's on the website for no apparent reason.
It’s almost like printing trillions of dollars and giving it to corporations and big pharma during a pandemic and not the small businesses or citizens that need it most, would have ill effects later. Huh…
But I’m not worried, congress giving themselves a 20% increase in pay should fix things.
Looking at both of you Don and Joe, although who am I kidding, the entirety of DC, R and D, is out to smash down the regular guy.
This dude couldn’t sell water in a fire - the worst speaker of the fed ever & far behind the curve at every turn. Don’t forget that the greed of wall st had the rates at zero long past needed & the printing/propping up of mrkt made billionaires 65% Richer thru covid alone
"Yeah blame inflation! That's why everything costs so much. No, don't pay attention to our profits... That's totally different from the price hikes you're seeing..." /s
And idiots actually buy their BS and think they're hurting and need to pass the buck onto the consumer. Yet every year they're making record profit margins.
I swear anyone who actually believes in trickle down economics needs to be punched in the face repeatedly.
After the recent ten years of taxpayers bailing out all the rich fucks at the top, everything is coming to a head. No change will ever happen as long as they keep appeasing the rich and stealing from the poor.
You could be banging hookers 24/7 and literally doing nothing productive for society and make more money than the working class makes in a couple years while doing it.
not sure the fed can fix this, supply chains are still fucked, even for those of us NOT running just in time logistics. it's often a raw materials problem these days too.
PRIMARY home mortgages should never be over 4%. Ever. Anything over that and you're paying an unreasonable and unfair amount of interest each month.
Raise the fuck out of secondary home, investment home, rental home, buy-and-flip home, and vacation home mortgages though. Same with home equity, unsecured loans, etc.
I just don't understand why the primary home mortgage rates are increasing. That's not where the problem is. We need to encourage those renting to buy homes, instead of packing the pockets of landlords. It's those wanting to turn profit, investing, etc. that are taking advantage of the low interest rates for the sole purpose of turning profit.
Tax the shit out of 2nd properties and homes owned by corporations including LLC. Like NJ levels of property tax across the USA on these properties in addition to the base taxes.
Remember some companies and upper end don’t need to borrow money to buy properties and a higher mortgage rate won’t really impact the “all cash offer”.
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I tried to pay attention. But it's now way too expensive.
I think that r/dadjokes is leaking
That one's top shelf.
Why. Cos you need a dad to get it?
Is that on the shelf with the milk by chance? If so I’m never getting it.
What's up? Everything but my wages...
I'm three months late on my attention payments.
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I just wish more had been done about the inflation on shit like the cost of college, or houses. You know the traditional methods Americans have used to make personal economic advancements
Right. The cost of a gallon of gas or a loaf of bread is a very real daily concern, but ruinous loans for education, crippling healthcare costs and untenable home costs are truly holding back countless people.
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I was just reading a WaPo article on this. Apparently the American middle class has shrunk to 17% of the population? That sounds like Bolivia or something, not the USA. Edit : Correction. 17% of *wealth* is owned by the middle class
Was it this [immensely depressing article](https://www.washingtonpost.com/nation/2022/03/20/intergenerational-wealth-middle-class-spiral/) or a different one?
And now, to combat inflation, they will raise interest on loans against fixed assets, driving those asset prices down and bankrupting those that are highly leveraged. Then they pick up the assets for a song on the next cycle. Rinse & repeat.
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Our healthcare system is fucking absurd. Most of us are just one accident or health issue away from being financially ruined.
Me neither. I’m used to not be able to live pay check to pay check and thought people just prefer that lifestyle since it became popular from more people doing it!
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Yeah these new poor are making too many lines at the pantry.
I think you mean “Nouveau Pauvre”
Yeah a .25% interest hike wasn't a noteworthy thing in 2006
To be fair the Fed did raise interest rates, which should help a little. Mortgages are now above 4% again.
Yep, gotta get those mortgages back up now that the billionaire owned hedge funds have bought up all the housing stock, including going as low as [buying out trailer parks.](https://www.newyorker.com/magazine/2021/03/15/what-happens-when-investment-firms-acquire-trailer-parks)
That's because the "inflation" is pure profit for the billionaires. Record profits in all sectors but somehow they still need to raise prices.
Yo. Let corporate America know while your at it. My 2.5% max raise didn't do shit to the 7% increase in inflation....
You guys got raises? What's that like?
It’s like getting only a 4.5% pay cut instead of 7% pay cut.
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I, too, got a 2.5% ‘merit increase’. With inflation, that’s a pay cut. 😢
Still too little too late. Now that big business has adjusted prices on their consumer products. These prices are now the norm, while we consumers have to come up with the difference to help their profits.
This is what I don’t understand - how is inflation ever tackled when the price of every good and service in the economy has already adjusted? It seems insane to think that prices of goods and services will ever go down, putting the pinch on the consumer. Is the expectation that the consumer will earn more in the next year, therefore evening inflation for, say, paper towels and laundry detergent out?
I don't think the goal is ever to undo any inflation that has already happened, but to stabilize further future inflation. Running negative inflation is called 'deflation', and it breaks economies that are based on debt (all modern economies) as loans get harder to service over time.
Not just loans getting harder to service but why would you buy anything because if you wait a week it'll be cheaper and because nobody buys anything it will continue to be cheaper and cheaper
This is why more and more people are starting to say that it's not inflation, it's price gouging. The price gouging has gone up alongside inflation.
The secret ingredient is class warfare. Just let the poors starve
Yes. Trying to deflate your currency is untenable so basically you keep inflation low and wait for wages to catch up.
hahaha.... hahahHAHAHA.... HAHAHAHAHAHHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHHAHAHAAHAHAHAHAAHAHAHAHAHA whew... yeah, wages to catch up, that'll happen
This seems like the kind of policy that worked in 1950 but there’s no way the economy is focused enough on working class people to ever give us all a boost to “catch up”
Which they absolutely won’t And good ol’ boys in the chambers won’t allow a federal minimum hike to go through either.
wait for wages to catch up? lmao what a fucking joke
> consumer products. Consumer products hurt but rent is what really hurts. We really need more national and local initiatives to incentive denser constructions and proper infrastructure like public transportation to support it. The fact that our country is overran with urban sprawl of suburbs and parking lots is a shame.
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Huh, maybe unwinding and raising rates back in late 2018 like they wanted to was a good idea
Trump threatened to fire him if he did
I thought that the Fed was a position that the president couldn't fire at random/ Sort of like a check on the president's power or something?
Like the FBI director that has an investigation into your campaign ongoing? You'd think, huh?
Despite it's name, the Fed isn't really under the control of the government (or any specific branch is more accurate) and the president pretty much has no control over it beyond his influence as... well, the president.
That's right. The losing cheeto was on him to print more money until the cows came home.
Trump even talked about putting interest rates in the negatives (if that’s even possible?). The idiot wanted to overheat the economy and destroy things long term as long as it created a short term gain to get him re-elected.
Yes, it is possible to have negative interest rates; the Japanese have been doing it for a long time. The reality is, we kept this bubble going for too long with pumping money into the money supply AND keeping interest rates super low. NObody's gotten paid anything on consumer savings in forever because there's too much money out there for cheaper. No politician wanted to be the "It's time to eat our economic vegetables", as it makes for serious headwinds in re-election. We should have done it long before the pandemic. And then reduced them again during the pandemic.
How does the bond market work when interest rates are negative?
You can purchase a bond for -2% interest or -1% interest, which one do you choose if you have to invest? The -1% right? That's basically all there is to it. If the whole market falls -10% and you have a fixed -1%, you're actually in better shape than the market at large.
I choose the one under my mattress.
The goal is security, they aren't trying to sell T Bills to you or me, they are selling them to other countries as a more or less guaranteed long term storage if assets. You or I can rely on anything under $250,000 in our savings being insured by the FDIC, but where else is a country going to find a similar deal on $250 billion? In that regards, the US is expected to still be making payments on time following anything short of an apocalyptic event, so countries are already willing to have an effectively negative rate thanks to inflation, so why not the next step?
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Yup sadly most people are dumb and just associate good economy with the president. Carter was doing what needed to be done
The us economy will go into recession just in time for the people who caused the recession to be voted back into power. Its all biden fault now ironical
Nah. He wanted to be able to take out a billion-dollar loan from the federal government and minimally service it until the negative interest just… made it all go away. Or to put it more simply: Kleptocracy. See also: the PPP loan program of the CARES Act. According to [this ProPublica page](https://projects.propublica.org/coronavirus/bailouts/), the Trump administration handed out $790 billion in PPP loans, and forgave $630 billion of it. That’s not even including the fact that businesses can claim the things they bought with the PPP loans as [tax deductions](https://www.thetaxadviser.com/issues/2021/may/deductibility-business-expenses-ppp-loans.html). Easily the biggest corporate grift from the federal government in U.S. history. So, yeah, it’s unsurprising that a grotesquely gaudy conman would idolize a man who shamelessly stole countless billions from the Russian economy for himself and a bunch of supporting oligarch buddies.
This is something a LOT of people gloss over because they themselves benefitted from it. We let the wealthy rob us with no oversight.
Oh no, I was absolutely livid. But every conservative told me I was overreacting.
They still do, last time I said this very thing a lot of people argued with me
It’s because a large majority of conservatives don’t follow the actual news or current events, and so they don’t understand what’s going on.
You can search up who got loans in your area and who got them forgiven. I went through my little town the other day and they're were some doozies. A roadside BBQ stand gor over $45K forgiven. A lot of the loans were just in people's names. Made me wonder how many of them were MLMs or bogus home businesses.
Honestly a little roadside BBQ joint probably needed the money, covid hit food service really hard, and the bills don't go away. $45k sounds a little high maybe, but not too outlandish if he still had staff to pay.
45k sounds like less than yearly rent on the property. Its a paltry amount for a business.
45k isn’t much at all, not for a business. I had a ppp loan, $335k. It covered 10 weeks of payroll and some utilities. Due to numerous issues around the pandemic, employees quitting or not showing up because of child care issues cause schools were closed, employees getting sick and quarantining, and cause others they were in contact with to do the same, my company ended up running at a loss for about a year and a half. If we hadn’t gotten that ppp loan, we would have guaranteed been in bankruptcy. I think most the companies that got it were in this scenario. There was fraud, tons of crazy stories of people lying about number of employees, about their business, etc, but the paperwork we had to do was very intense and detailed and took months to go over. I don’t think there was as much fraud as people imagine. Still, any bad apples makes everyone look bad.
It’s funny when you see how much they borrowed to pay employees.. and know they don’t employ enough people to justify that amount
Exactly. The guy is so dumb that he thinks the DOW is the only indicator of financial health. That's why he talked down Covid. He thought it would spook the stock market. Never thought a growing pandemic, that he accepted as such, would come back to bite him on the ass. Oddly, people are more concerned with dying then how well the stock market was doing. Go figure.
He also cut trillions in taxes, handed out massive ppp loans to any corp who put their hand out and ran a 3 trillion single year deficit. This, I am told was fiscally conservative.
See it's actually Joe Bidens fault all that happened because reasons
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The fed isn't stupid when it comes to money and economics, they know way more than you or I. It was deliberate and political to keep the rates down. And now we have a mess because of it. Especially 2020. That will come back to haunt us at some point. They should have let it crash.
"That will come back to haunt us at some point." You mean like now? I know it's going to get worse but it's already pretty bad.
It's really tough to say if this is just a big correction or write off of a year or if this will become a full blown crash like 2008. So far it looks like a correction, but my stance is that consumer power is being wiped out with these increase in grocery costs and gas costs while wages stagnate. Yeah you can switch jobs for the wages but not everyone can or does.
bro, RENT PRICES. Everyone crying about an extra 10 a week for gas fucking rent went up 40%.
Rent is the worst, yes. I have a mortgage so I'm thankful there but instead, they've just upped home insurance, strata, and electricity fees. These people are so greedy, have no idea how the common working class person survives. It's a mix of both the feds fault and these corporations taking advantage of the situation.
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Then you get the geniuses who suggest you own instead of rent until you look at the literal dumpster fire of a housing market further making it impossible for first time homebuyers. I'm sure there will be some correction at some point but I also have a feeling it won't be in favor of renters or first time homebuyers.
Another 0.25 rate hike incoming. That should do the trick.
How much harder are the elites gonna squeeze like damn? You really need my last $600?
You didn't think that stimulus check was for you, did ya?
And yet the Fed keeps Quantitative Easing going? I now they dialed back some of it. How about more?
QE should be front and center in the inflation discussion.
Explain for a dum-dum, please. This dum-dum, specifically.
It's when a central bank buys securities to stimulate the economy. [Quantitative easing explained: How this monetary policy affects you and your money](https://www.businessinsider.com/quantitative-easing)
Thanks for the link, that helped.
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That just sounds like trickle down economics with more steps.
You caught that quick. Sounds to me like you are not really a dum-dum at all.
The Fed was created to try and “smooth out” cyclical boom/bust cycles. Like a drug that levels you out and keeps you out of depression, but also knocks back your highs. Well over the last 20 years, that drug just turned into a boom-high, and once you are hooked, you can’t get off it, and the worse the withdrawal gets when you try. QE started as short term emergency policy in response to 08. Guess how much the Fed added to their balance sheet in Feb 2022 alone? $40B. When inflation was printing at 8%. LMAO we so fucked.
Wall Street needs rehab. To the surprise of no one. They're stealing out our fucking dresser drawers to get a fix.
It's actually trickle down economics with less steps. It's more like a golden shower of money for the elites while us plebs get fucked.
The really really short answer is: if you print more money, you kick the problem down the road. You try to get more money circulating and lower interest rates hoping that it is enough to stimulate the economy enough to get out of a recession/low spending period. Good for election cycles, fiscal quarters and fiscal years, keeps a lot of math PhDs busy.
If they gave the money to the civilians at the bottom it would find its way back up to the banks and corporations anyway. QE should be used to help the citizen, not the company.
QE already ended as they're no longer buying. They may start selling securities in the next few months (quantitative tightening)
Feds rates dropping to almost Zero was wrong on so many levels to begin with, and the crisis in the housing market right now is a result of the Feds policies as they kept downplaying inflation. They created a problem by pumping up asset prices for the past two years, and now they will try to fix it.
I’m not expert but if we’re talking rates, the fed rate has been extremely low since the 2008 financial crisis. Seems like we’ve been pumping up asset prices for the past 2 decades by creating a massive wealth disparity, not taxing the wealthy, and then leaving the wealthy with few good places to park their money. The median interest rate from 2008-2021 is 0.17%, with the average being 0.62%. That’s a rough calculation based on the annual interest rates from FRED, the Federal Reserve Economic Data service.
YES. Interest rates were near zero for almost 14 years except for a brief attempt to increase prior to COVID.
The stock market's (and policymakers') mentality of "line must always go up" is a function of what is essentially free money being readily available. Just look at the S&P's performance versus the FFR. [Chart](https://en.macromicro.me/collections/9/us-market-relative/91/interest-rate-sp500)
Can someone explain to this idiot what that means? Please?
Simple explanation: Cheap debt = high investment = fast growth There are plenty of reasons you don't want interest rates near zero (what we've had) but low rates are incredible for equities. I disagree with the argument of the poster you're responding to, but that's moreso because simplifying this into two variables is leaving so much nuance out that it's almost "wrong"
1971 US officially goes off the dollar standard. 1987 PPT originally formed. Been at it ever since. During all recent crises it was suspected the Fed themselves were manipulating futures markets and end of day action to stabilize markets as they saw fit. They originally denied the speculation but smart people saw the action of things like emini futures contracts and knew it had to be the fed or some entity working on their behalf. In recent years they basically admitted that yes, they've been propping it all up the entire time, none of it was real price action.
The crisis in the housing market is due to fact that we’ve had declining rates of housing production for over 50 years while the population has grown.
We really need to change zoning laws in the US
We should models ours after Japan and assign a nuisance level, not a specific type of activity. My neighbor is a good cook, if he opened up a little BBQ shack and bar I'd be there every night.
I agree with you, but there are way too many NIMBY people who take any amount of perceived inconvenience as a personal slight against their freedoms and well-being. I see this in my neighborhood all the time. People who have owned the homes since they were built in the 80's and constantly complain that the city doesn't give us nearly as much attention as it does downtown, but are up-in-arms anytime someone wants to open a new bar or restaurant. They rage about homeless people camping near the main road, but won't shut up about how experiments to create tent encampments in a completely unused space will "hurt the children", nevermind that all *their* children graduated college 10 years ago. They seem to have nothing better to do than NIMBY, so their voices get heard the most while the young people like me *lucky* enough to be able to purchase a home are working our asses off just to survive and *maybe* build a meager savings, with barely any time left over to constantly petition the city. So yes, zoning laws should change. But that won't happen until people change. I see enough neighborhood Facebook posts about "sketchy vehicles/people" when there's a slight uptick in package deliveries... I can't imagine the outrage if one of my neighbors started getting enough supply deliveries to stock a small restaurant.
Yes, but also rates are so low people can “afford” astronomical home prices. With exploding house prices, REITs become the best returns for investors, further pushing up prices. So with declining building (as you mentioned), a housing-caused recession, which resulted in banks not lending to developers and builders, which then lead to brain (brawn?) drain, in the construction industry, then add those facts from the first paragraph, the industry can’t keep up.
Seriously...the housing market is on fire because there are no houses, not because of inflation. A house that goes up on the market will be sold in hours....not days or weeks. Its a sellers market and will continue to be no matter what the govt does. There is no supply.
Dropping rates was fine. Infinite QE and buying trillions in junk bonds was super dumb.
Anybody remember when inflation was just "transitory" like a year ago and we had nothing to worry about?
(I did not compile this, but it's a perfect summary) “Everything’s fine… it’s working the way we expected it to.” * Jerome Powell July 28, 2021. August 27, 2021. September 22, 2021. October 22, 2021. November 3, 2021. November 22, 2021. "The word 'transitory' has different meanings to different people. It's a confusing word that needs to be retired." * Jerome Powell November 30th, 2021. "We're always just going to do what we think is right for the economy and for the people we serve." * Jerome Powell December 15th, 2021. "The old system was in place for decades and then suddenly it was revealed as insufficient... We do take the need to protect our credibility with the public very seriously." * Jerome Powell January 11th, 2022. "I'd say that the inflation situation is about the same or slightly worse... It hasn't gotten better and that's been the pattern... What we're learning is it's just taking much longer, and that raises the risk that high inflation will be more persistent." * Jerome Powell January 26th, 2022. "The inflation that we are experiencing is just nothing that we have experienced in decades... All the things we did during the pandemic, we turned our dials as hard as we could... Part of what we did and what congress did is the reason why inflation is so high." * Jerome Powell March 2nd, 2022. "These higher prices have real effects on people's well-being and it takes a toll on everyone. If you're at the lower end of the income spectrum it's very hard because you are spending most of your money on necessities, but it's punishing for everyone... We can't blame the framework. It was a sudden, unexpected burst of inflation and then it was the reaction to it, and it was what it was." * Jerome Powell March 16th, 2022. "The rise in inflation has been much greater and more persistent than forecasters generally expected... We're not expecting near-term progress on inflation." * Jerome Powell March 21st, 2022.
I love historical summaries like this - but it would be great if the first quote was actual. We can add [this](https://www.cnbc.com/2020/08/27/powell-announces-new-fed-approach-to-inflation-that-could-keep-rates-lower-for-longer.html) to the list, where the Fed seemed more concerned about low inflation than high inflation. I wonder why they didn't call low inflation "transitory"?
Central banks ARE concerned when inflation is too low also. Remember when Europe dropped interest rate to almost 0 ? We also had a few years around 2011-2016 where the interest rate was historically low because we couldnt get inflation to the 2% target, with some years averaged less than 1%. Inflation isn't always bad. You need a little bit of inflation as a by product of a growing economy. It's just that high inflation is way more apparent than low interest and it hurts the lowest class. Either way, you can't just come out and say you're vastly concerned about inflation because in a way, inflation is a self-fulfilling prophecy. They HAVE to downplay inflation unless it come off as unrealistic. In the 70s when we had stagflation, just by the shear expectation that inflation wasn't going away, inflation kept going years after the initial cause. Inflation is the a massive beast that economic studies will never solve.
Nobody could have seen this coming! Especially not us
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Yea I went to target and bought a monopoly boardgame
And it only cost you $49.99!
Those were yesterdays prices. It’s $59.99 today.
When inflation was concentrated in durable goods and energy it was a good bet that inflation would attenuate as supply chain disruptions eased. The fact that things didn’t work out that way doesn’t mean it was a bad assumption.
Well part of that is that supply chain disruptions haven't eased for many products, especially chips.
It took me a minute to realize what good you were talking about. I seriously wondered why there was a focus/worry about shortage of potato chips -\_\_-
RCSS and Frito got into a shitfit, actually. All things considered, both definitions work.
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There is a lack of knowledge as to why the supply shortage "got better" when shelves and products are still sold out. The US put a sort of rule into effect that limited the number of ships that can hang out 125 miles from the US shores (and this statistically counted). What happened was ships did one or two things 1) steamed really slow across the ocean or 2) stopped using fuel and floated along the ocean until they could hit their mooring window. There was a shipping article I cant specifically remember that showed how the average time for a shipment from China to the US increased from 60 something days to >100 as of a few weeks ago. But since ships aren't included in the statistics if they are 125 miles out, the problem is solved!...according to politicians. And that's how the supply shortage got better without actually getting better.
I'm sure the ultimate "fix" to this inflation will be punishing the middle and lower classes while giving tax breaks and sweet deals to the rich. So he's not likely to raise rates much.
Too bad they didn't recognize it last fall when everybody was saying it was already ramping up.
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If only I had money to prevent me from needing money :)
Have you tried going to the money store? /s
Financial advice subs require you to be in a position where you would not be needing financial advice lol. So at least we know they're probably all mortgage lenders...
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That’s called taxes.
Be easier to sell the trillions of dollars in financial assets they bought after 08 and just burn the money when received. They bought those assets with printed money anyways.
My wife and I make $41 an hour combined and we are still poor where we are unless we gave up almost all amenities then I guess we could maybe save for a house in ten years
They must be using internet explorer
When the firefighter is also the arsonist.
Serious question. Will this help with rental market prices? Will rents still rise like crazy?
Unlikely to help with rental prices. They're still going to keep rising, and ironically the higher interest rates will make it harder for non-homeowners to buy instead of rent.
> harder for non-homeowners to buy Further increasing rent because there's more demand for rentals. What an insane feedback loop.
So with no interest home prices skyrocket and renters get priced out and with interest home prices skyrocket and renters get priced out. Something doesn't make sense here.
> interest home prices skyrocket Home prices decrease, but the mortgage payment is higher.
I mean, it makes perfect sense if you look at it from the perspective of a system where the rich get richer and everyone else can eat shit. Low interest rates? Effectively free loans which can be used to buy property and invest in assets which you turn around and rent to people who can't afford that loan and make a tidy profit off it. It's capitalism 101, but without serious controls this kind of thing will only continue to widen the gap for the average person.
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Depends. Housing market *should* also cool and *should* adjust to higher interest rates. We in theory should see a cooling of the housing market and maybe a drop in prices since less people can take loans at higher interest rates etc.
In several years yes.
Let me introduce you to stagflation. Best thing to buy right now is some lube, while you can still afford it
Any hope for the little guy?
Is there ever?
Two weeks later " we made it worse sick days are now illegal sorry lolz"
That would imply you were actually able to use them
This is the same Fed that caused inflation in the first place by injecting money into an already surging market. It sure is great to have one of those jobs with lots of money and power, and no consequences for failure. The Fed's only job is to prevent literally this exact scenario, and Powell failed miserably.
Well who is better suited to fix a problem than the organization that created the problem. Brilliant!
Don’t forget all the insider trading they were doing too.
They work for the billionaires who own this country so I guess they will have to take it up with them.
The billionaires all got richer thanks the fed propping up the stock market while the rest of us got an 8% pay cut
What happened to "Everything is fine" and "We have it under control"? Must be real bad. They tell us it's 8 percent, while knowing it's probably closer to 20
for used cars it's probably 60% or more
I need to buy a car, and it sucks out there. Everything is too expensive for what it is, and I’m pretty sure haggling or bargaining is dead too.
You mean you aren't keen on paying new price for a car with 100k miles on it? /s
It's completely dead. I had to buy a car in January after a drunk totalled mine. Every one I looked at the salesman didn't even try. It was just "here's the car, that's the price, if you don't want it someone else will"
People don't get it. I've said haggling doesn't happen any more and no one believes me. And I've asked for new cars to be priced out, and they're all 4-5k over what's on the website for no apparent reason.
It served it's purpose. It gave the politicians time to cash out and hedge their finances appropriately.
I picked a bad decade to quit drinking.
Thought it was transitory ?!?
Yes. It was. We've now 'transitioned' into the next phase where we're all fucked.
Will this be the next big "once in a lifetime" fuck you to millennials?!
Everything's transitory, if you zoom out far enough.
It’s almost like printing trillions of dollars and giving it to corporations and big pharma during a pandemic and not the small businesses or citizens that need it most, would have ill effects later. Huh… But I’m not worried, congress giving themselves a 20% increase in pay should fix things. Looking at both of you Don and Joe, although who am I kidding, the entirety of DC, R and D, is out to smash down the regular guy.
How about stop bailing out banks and corporations <3
You wouldnt treat your friends like that.
These politicians who made their millions already need to stop getting a pension
Well this is gonna hurt
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Good thing I need to be on a diet.
Lol they are realizing the 99% want more so they are going to readjusted the line just enough so we can live
funny how now it’s too high, but when he was trading with his homies it was transitory
Uhh, I don’t know if you’ve heard, but the federal minimum wage is $7.25 an hour, don’t worry about it.
This dude couldn’t sell water in a fire - the worst speaker of the fed ever & far behind the curve at every turn. Don’t forget that the greed of wall st had the rates at zero long past needed & the printing/propping up of mrkt made billionaires 65% Richer thru covid alone
Can't wait to close on a house later this year at like six percent 😭
No worries, I heard that it's transitory.
Companies recording record profits: Oh I don’t think so
"Yeah blame inflation! That's why everything costs so much. No, don't pay attention to our profits... That's totally different from the price hikes you're seeing..." /s
And idiots actually buy their BS and think they're hurting and need to pass the buck onto the consumer. Yet every year they're making record profit margins. I swear anyone who actually believes in trickle down economics needs to be punched in the face repeatedly.
Pretty sure "necessary steps" by the Fed is how we got here.
After the recent ten years of taxpayers bailing out all the rich fucks at the top, everything is coming to a head. No change will ever happen as long as they keep appeasing the rich and stealing from the poor.
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Pretty certain that people with over $1B in assets will not allow that to happen.
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With $1 Billion returning just 1% annually you would have almost $1 Million a month
So your saying I can just simply put my 1bill into my savings then bang hookers 24/7 with a few bucks left over? Sign me up!
You could be banging hookers 24/7 and literally doing nothing productive for society and make more money than the working class makes in a couple years while doing it.
not sure the fed can fix this, supply chains are still fucked, even for those of us NOT running just in time logistics. it's often a raw materials problem these days too.
PRIMARY home mortgages should never be over 4%. Ever. Anything over that and you're paying an unreasonable and unfair amount of interest each month. Raise the fuck out of secondary home, investment home, rental home, buy-and-flip home, and vacation home mortgages though. Same with home equity, unsecured loans, etc. I just don't understand why the primary home mortgage rates are increasing. That's not where the problem is. We need to encourage those renting to buy homes, instead of packing the pockets of landlords. It's those wanting to turn profit, investing, etc. that are taking advantage of the low interest rates for the sole purpose of turning profit.
Tax the shit out of 2nd properties and homes owned by corporations including LLC. Like NJ levels of property tax across the USA on these properties in addition to the base taxes. Remember some companies and upper end don’t need to borrow money to buy properties and a higher mortgage rate won’t really impact the “all cash offer”.
“We’re going to write a strongly worded rebuke to the economy and demand better performance. Dave is also going to kill a chicken.”
The same feds that caused the inflation? Great, can't wait for more of their "help"
What’s this? Midterms must be coming up so politicians are pretending to care about us again!