daedalus said:
Compressed-Village said:
Powell's speech, in plain English:
"There is too much debt in the US & globally. It's hurting growth. This can be resolved 1 of 2 ways:
1) Widespread defaults (including on sovereign debt)
2) Inflate it away
Today we are accelerating Option #2."
The way to reduce debt is to increase borrowing costs. This is focused on the cost of debt, not debt itself. As far as "major policy shift", this is anything but and is, in fact, more of the same. I agree with IC. Spigot full blast. We are going to party until we puke, and the hangover will be quite a doozy. But fortunately most of won't have jobs we'll need to get up early for.
Three major problems:
1) The Dow/Investor expects this now. Fed basically blow off both of its mandates (managing unemployment and inflation) and the Dow was like meh (flat for most of the session and +250 at the end). This is junkie/addict behavior
2) Many amateurs have started entering the market to supplement their income (cuz they have reduced hours or no jobs). Looking like dot.com bubble again.
3) We did all this tap turning for no tangible result...no infrastructure, no infusion of capital to working/middle class, no national healthcare, no longterm investment of any kind...it's just basically pumping money into the market.
This will turn out badly in a few years...real bad and people will misinterpret the causes again. The rich knows and are getting out the game.
https://www.bloombergquint.com/onweb/ultra-wealthy-club-stockpiles-cash-as-u-s-economy-fears-grow
Oh by the way...don't look at the dollar.
