patrick.net

I too think higher interest rates would be a good thing - all else being equal. But what will need to be done to make rates stay higher? I'm no economist, but it seems like rates have been falling for a long time due to slowing economic growth, and the rate drops have been an effort to juice growth.

Currently rising rates / inflation seem to be due to the combo of:
-overzealous printing presses
-covoid policies (including both western policies and also chinese lockdowns)
-energy prices and product shortages due to war
-supply chain issues

I dont think those factors should persist for long, although I'm mighty suspicious of how they all came together suddenly. Feels kinda intentional to me, and so I suspect they will persist for longer and/or new factors will magically appear.

But anyway, if those factors went away, I would think inflation and rates would trend back towards what they did in recent years.

I dont know enough about economics to say if the powers that be are significantly weakened by low rates. It seems like we've been doing a lot of printing press lately, and maybe that's because they couldnt just lower rates further like they could in the past, and so we printed instead. Not really sure. But if they are weakened by low rates, then maybe they will try to manufacture ongoing conditions that allow them to keep rates higher.

Up until this past yr, I really thought the inflation would be temporary and short lived, basically going away as the covidian era subsided. But it's starting to feel intentional now.

Hircus says

I dont know enough about economics to say

Don't feel bad. The economists don't, either.

Ceffer says

Hircus says

I dont know enough about economics to say

Don't feel bad. The economists don't, either.

An economist predicting anything is about as accurate as a statistics/probability expert predicting exactly on what number a roulette wheel ball will land.

Hircus says

but it seems like rates have been falling for a long time due to slowing economic growth

I'm not econonut either but from what I've read or seen rarely: It may be related to the tech-deflation they've been fighting off for many years rather than slowing economic growth.

Apparently a certain amount of money needs to be printed to adjust to .. increases in GDP? .. in a Keynesian system as well. Not like the shit they did over the past 2 years tho.

We are flat-ass broke. We cannot afford that kind of normalcy.

GreaterNYCDude says

It was never normal having 0% interest (free money) or 0.01% interest rates on savings accounts

There was never a precedent for it ever. Maybe for a short time after the collapse of 2008, but to just insist that something like that was normal was idiocy. Buying a three year CD of 5% or 6% was a long established practice of retirees who didn't want the risk that stocks bring. $100K in a 6% CD would have produced a risk free of about $500/month which would have been spent and taxed. Why would the banking system even fool with such a silly concept as crediting 1 cent a month to your checking or savings account anyway.

Hircus says

and maybe that's because they couldnt just lower rates further

We had the example of Japan before we started it over here. It was either in the 80's or 90's they put interest rates to zero to boost their economy and wound up with a decade of stagnation when you can't go below zero.

If the banking cabal raises interest rates 3%, with about $31 trillion in Treasuries outstanding, that would be about $900 billion in extra $ that would need to be accounted for.

The Federal budget is about $4 trillion per year with about $1 trillion of that increased borrowing.

Does anyone think the government is going to raise taxes $900 billion per year?

Does anyone think the government is going to cut spending $900 billion per year?

If not one or the other or a combo of both, that leads to an extra $900 billion of debt that needs to be financed. With the US GDP @ about $23 trillion, that represents about 4% of America's GDP or about all of its savings per year.

The math just doesn't pencil out. The banking cabal hopes that the economy grenades so that it can go back to zero or negative interest rate policy.

Just default. France did it several times in the 19th and entered the 20th Century as a top 3 Power.

The bigger shoe no one is talking about is the big state pension funds which rely on overly optimistic 7-9% market returns just to stay afloat.

Watch California in the next 5 years if the interest rate environment stays high and growth stays low.

One great way to prevent the Cali Exodus is to campaign WITH Wokies to make 6 month residency a requirement to collect the pension, or pay a 30% tax.

"Show Solidarity - Teachers, Clerks, etc. - You Must Stay in California"

Government Employees lean left, let them stay in California and help maintain the system that maintains their pension. NY, IL, etc. too.

AmericanKulak says

One great way to prevent the Cali Exodus is to campaign WITH Wokies to make 6 month residency a requirement to collect the pension, or pay a 30% tax.

"Show Solidarity - Teachers, Clerks, etc. - You Must Stay in California"

Government Employees lean left, let them stay in California and help maintain the system that maintains their pension. NY, IL, etc. too.

I like that idea. Very creative and logical. Blue types would love it as well. Win win.

AmericanKulak says

Government Employees lean left, let them stay in California

I know several who stampeded out of California with their public employee pensions, to low-tax or no-tax states, leaving us Tax Donkeys behind to pay for it.

Misc says

If not one or the other or a combo of both, that leads to an extra $900 billion of debt that needs to be financed.

They will just borrow it. We're in the end game. Interest rates will continue to go up, otherwise people are going to start starving and that will lead to real unrest.

Misc says

The math just doesn't pencil out. The banking cabal hopes that the economy grenades so that it can go back to zero or negative interest rate policy.

Haha - the Fed will just create more money. They will loan to banks $ at near 0% and allow the banks to buy Treasury Bonds. This is Quantitative Easing.

I have had this conversation a few times with a friend - inflation or deflation? I'm of the mindset that they will try to hurt as many people as possible, so we're going to see (paradoxically) DEFLATION. But I could be wrong. I think a significant number of people have ARM mortgages. Raise interest rates to around 10%, and they are screwed, bank gets their home for literally free.

People have to be made to feel it's "their fault" that they cannot afford to eat. Inflation makes people think that interest rates MUST go up. That will bankrupt a lot of people, but "what choice did the government have? I shouldn't have taken on so much debt, especially a non fixed interest rate. I'm stupid. This is my fault..."