Int rates vs inflation
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Started by wglassfo - March 7, 2021, 2:47 p.m.

Some of you may have noticed bonds going down which means higher int rates. I know confusing but bonds confuse me a lot

Any way, as near as I can understand things, the Fed either does some thing or stands aside. Powell tried to talk int rates down but nobody paid him a bit of attention other than to say action speaks louder than words

So: Will the Fed take action to cap int rates??. I think the Fed has no choice. With the stimulus bill about to be passed  and all that cash going into the economy, you just have to know most people can't stand to have money in the bank. Most spend their money either on goods and services or invest in the stk market. All of which will create inflation. In the mean time the bond fellers [and female fellers?? how do you say that and be PC???] will sell more bonds until the Fed does some thing. I will bet there are some ladies selling bonds, so we will just leave it at that before I get in more trouble

So: The Fed is in a bind. Higher int rates or higher inflation. Gilly Gee: What to do. They can't stop both although you would think they can if you listen to Powell, but the bond market is having nothing to do with empty words, and just wait until the folks get their hands on that free stimulus money. Powell might try a twist but I looked that up and a twist is too complicated for my low IQ brain, so I hope he doesn't do a twist or I will not be able to post any more or at least as much.

Well: The Fed said they would tolerate some inflation, in fact they want inflation. 2 % or even more if you average the last 10 yrs or was it the last 5 yrs?? Any way, seems to me the Fed is just fooling the folks and inflation it will be. Now inflation could get out of hand but the Fed thinks they have everything under control. You and I may disagree, but the Fed did not ask you or me. Now their CPI method of measuring inflation is like trying to bring a dead mule back to life. When that don't happen, they just go down the road a piece and tell the folks that mule is alive and well. Say it often enough and it must be true, cause that is what everybody else is saying. Well you and I know CPI is like a dead mule but don't tell anybody or they will call you a right wing terrorist or is it a left wing terrorist. I don't know that stuff confuses me

So: IMHO the Fed will take some action to put a lid on Int rates and inflation will carry on to new highs. Have you priced any lumber lately, [probably not] noticed the price of pump fuel slowly creeping upward, [maybe] priced a new or used vechicle. [some might have looked at some prices] Seems like people will buy no matter the price and the Fed sticks to it's CPI measure of inflation. Most people don't pay much attention to this kind of stuff, so they don't know inflation is sort of creeping up on a feller or lady. People talk about inflation but does anybody do anything. I bet not one person in 10,000. Heh Heh. I got me some physical silver and gold which might not amount to any thing but is kind of comforting to have, just in case?? you know how it is

So: I think inflation will continue to increase. And of coarse you can't ignore all the free stimulus money just falling out of trees. I think inflation will be noticed by most people when it is too late


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