The thing is, if the Fed wants rates cut below the inflation rate, in other words, negative real rates (interest rate – inflation rate), it will have to print new money and use it to pull debt out of debt markets.
If this chart starts hitting new highs, then I’m going to conclude that our monetary policy includes a Ponzi aspect, since new money is needed to keep things going.
>Ponzi schemes require a constant flow of new money to sustain themselves
https://fred.stlouisfed.org/series/WALCL
New highs indicate Ponzi. I think the western central banks know that, which is why they are resisting. Japan is clearly in a Ponzi. Their inflation rate is 3%, but they want interest rates on sovereign debt at 1%. The only way they can pull that off is for the central bank to print the money and buy the debt themselves.
QE is gold’s and bitcoin’s friend.
Portfolio manager take the wheel
Shouldn’t this say “portfolio manager needs the Fed to cut rates five times next year to remain solvent”
Seems like that’s probably more accurate.
Why? I mean what reason is there to cut anything? 5-6 percent rate is still low compared to the historical average. 2-3 percent rates are not normal.
So the rich want to cut rates that means we need to raise them right?
Oh no I’m over leveraged! Please save me! This is actually the type of investments I want to see become insolvent. Remove that access money! You gambled and lost!
9 comments
Ok well if the portfolio manager said so…
I concur!
Definitely not.
The thing is, if the Fed wants rates cut below the inflation rate, in other words, negative real rates (interest rate – inflation rate), it will have to print new money and use it to pull debt out of debt markets.
If this chart starts hitting new highs, then I’m going to conclude that our monetary policy includes a Ponzi aspect, since new money is needed to keep things going.
>Ponzi schemes require a constant flow of new money to sustain themselves
https://fred.stlouisfed.org/series/WALCL
New highs indicate Ponzi. I think the western central banks know that, which is why they are resisting. Japan is clearly in a Ponzi. Their inflation rate is 3%, but they want interest rates on sovereign debt at 1%. The only way they can pull that off is for the central bank to print the money and buy the debt themselves.
QE is gold’s and bitcoin’s friend.
Portfolio manager take the wheel
Shouldn’t this say “portfolio manager needs the Fed to cut rates five times next year to remain solvent”
Seems like that’s probably more accurate.
Why? I mean what reason is there to cut anything? 5-6 percent rate is still low compared to the historical average. 2-3 percent rates are not normal.
So the rich want to cut rates that means we need to raise them right?
Oh no I’m over leveraged! Please save me! This is actually the type of investments I want to see become insolvent. Remove that access money! You gambled and lost!
To bad so sad.