Another dollar destroying situation

[Djfan]

I have said for years that the path we are on is unsustainable.
https://www.marketwatch.com/story/w...se-repo-facility-is-surging-again-11621904689

 

[Confluence]

For USD to go markedly lower, something has to get markedly stronger. What is that currency/asset?

 

[Stainless]

I keep thinking inflation has to kick in at some point, but I’ve been thinking that for a decade or more.

 

[DBS1970]

For USD to go markedly lower, something has to get markedly stronger. What is that currency/asset?

Wrong.

inflation will do the trick outside of anything else. Right now we are going to be entering another hyperinflationary cycle we’re inflation rates are double digits. That’s what happens when you double the money supply digitally in just over a year. Nothing have to get stronger versus a dollar when our own government is devaluing it.

 

[Steeltime]

I keep thinking inflation has to kick in at some point, but I’ve been thinking that for a decade or more.

Inflation is here, Stainless.

Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008

The Consumer Price Index rise for April from a year earlier was the sharpest since September 2008.

www.cnbc.com

 

[Djfan]

If you all don't think that this is planned, you're smoking some strong stuff.

 

[DBS1970]

If you all don't think that this is planned, you're smoking some strong stuff.

Yeah it’s almost like a group of individuals is trying to punish the American people for having elected a president a man who dared put American interests first.

 

[deljzc]

Why would they plan inflation? It's going to destroy Biden's Presidency and greatly lower his ability to get re-elected.

Interest rates are going to have to go back up - which will slow the housing market and car market. His deficit spending plans are going to cost more and more according to the that "independent" Congressional Budget Office (they have to use current interest rates to determine long-term costs of federal borrowing). I mean, it is a NO WIN situation for democrats.

They were told by very bad lie, by democratic leaning and globalist federal reserve chairs (cough, cough, Janet Yellen), that their 4 trillion dollar covid stimulus spending wasn't going to cause inflation (or they could CONTROL it after it happened).

And here we are. If inflation even closely lasts like it has over the past 2-3 months for the rest of year, Biden and the democrats are toast in 2022. You can't have gas, eggs, milk, cars, lumber, meat, fast food, daycare, etc. all go up 10%-15% and not have people start to pay attention. You can't. And you can't talk your way out of it either.

Biden had the gall today to say the economy was doing "great". It's a lie. And the American people know it.

The Republicans don't even NEED Trump if the economy starts to hyper inflate and interest rates go back up to 5-6%. All they have to do is pound away at the bad economy, inflation, the border debacle and crime. That's it. That's the only message you need in order to win.

K.I.S.S. Keep It Simple Stupid. Getting Trump involved just makes it a mess. There are too many issues you can win on without his help.

 

[Djfan]

Why would they plan inflation? It's going to destroy Biden's Presidency and greatly lower his ability to get re-elected.

Interest rates are going to have to go back up - which will slow the housing market and car market. His deficit spending plans are going to cost more and more according to the that "independent" Congressional Budget Office (they have to use current interest rates to determine long-term costs of federal borrowing). I mean, it is a NO WIN situation for democrats.

They were told by very bad lie, by democratic leaning and globalist federal reserve chairs (cough, cough, Janet Yellen), that their 4 trillion dollar covid stimulus spending wasn't going to cause inflation (or they could CONTROL it after it happened).

And here we are. If inflation even closely lasts like it has over the past 2-3 months for the rest of year, Biden and the democrats are toast in 2022. You can't have gas, eggs, milk, cars, lumber, meat, fast food, daycare, etc. all go up 10%-15% and not have people start to pay attention. You can't. And you can't talk your way out of it either.

Biden had the gall today to say the economy was doing "great". It's a lie. And the American people know it.

The Republicans don't even NEED Trump if the economy starts to hyper inflate and interest rates go back up to 5-6%. All they have to do is pound away at the bad economy, inflation, the border debacle and crime. That's it. That's the only message you need in order to win.

K.I.S.S. Keep It Simple Stupid. Getting Trump involved just makes it a mess. There are too many issues you can win on without his help.

I can only speak for myself here. I am convinced that the undoing of this formerly great nation is the goal, and many politicians are complicit. I believe it is planned, and being pursued actively. I am also convinced that Biden is a puppet in the game, being incapable of farting without help and direction. There is a lot of power and money to be gained by the players, and some puppets are deceived into thinking that they will be rewarded with both power and money. That is why they play along.

Just my two cents. But, I really believe this.

 

[Confluence]

Wrong.

inflation will do the trick outside of anything else. Right now we are going to be entering another hyperinflationary cycle we’re inflation rates are double digits. That’s what happens when you double the money supply digitally in just over a year. Nothing have to get stronger versus a dollar when our own government is devaluing it.

Hopefully Burgandy will be along soon to explain how international trade and currency works. Inflation matters in a relative sense, to other currencies, commodity prices, etc. For example, if the US has 10% inflation but Germany has 20% inflation, the USD will strengthen relative to the Euro. So the US imports will be cheaper, and exports lesser....which is why the Germans gave up the DMark and embraced the wasteful French and Italians more than two decades ago.

 

[Djfan]

Why would they plan inflation? It's going to destroy Biden's Presidency and greatly lower his ability to get re-elected.

Interest rates are going to have to go back up - which will slow the housing market and car market. His deficit spending plans are going to cost more and more according to the that "independent" Congressional Budget Office (they have to use current interest rates to determine long-term costs of federal borrowing). I mean, it is a NO WIN situation for democrats.

They were told by very bad lie, by democratic leaning and globalist federal reserve chairs (cough, cough, Janet Yellen), that their 4 trillion dollar covid stimulus spending wasn't going to cause inflation (or they could CONTROL it after it happened).

And here we are. If inflation even closely lasts like it has over the past 2-3 months for the rest of year, Biden and the democrats are toast in 2022. You can't have gas, eggs, milk, cars, lumber, meat, fast food, daycare, etc. all go up 10%-15% and not have people start to pay attention. You can't. And you can't talk your way out of it either.

Biden had the gall today to say the economy was doing "great". It's a lie. And the American people know it.

The Republicans don't even NEED Trump if the economy starts to hyper inflate and interest rates go back up to 5-6%. All they have to do is pound away at the bad economy, inflation, the border debacle and crime. That's it. That's the only message you need in order to win.

K.I.S.S. Keep It Simple Stupid. Getting Trump involved just makes it a mess. There are too many issues you can win on without his help.

I want to add one more thing - The market here could be so bad that people are killing each other for food, and the GOP won't retake power. The corruption in elections is now so bad that voters no longer have a voice in the ballot box. The GOP is done as a national force due to stolen elections. It simply doesn't matter anymore.

 

[deljzc]

Well, DJ, I think you are kind of too far down the rabbit hole. But to each his own.

I still think Trump lost. I still think Republicans will win the mid term elections and re-take the Senate, if not the House if inflation is bad enough. While I am certainly an enemy of globalization to the point of open borders, free trade would be great if other countries lived up to what we espouse and offer. But they just take advantage of our generosity, so I say **** 'em for a while. It's not good for us, but it's WORSE for them. And I truly believe the only way to change the cheating ways of other countries is to stand up to them, call their bluffs and wait them out. We can afford it. They can't.

Democrats have fallen so far back into their old tax-and-spend policies it's almost comical how easy it is to call them out on it. I just have to hope there are enough voters smart enough to see how bad tax-and-spend is that it makes a difference. I think people over 40 know it in their hearts and they are the ones that vote. And anyone that lived through Jimmy Carter should clearly see the similarities already.

Don't give up. I just don't believe it's as bad as you say. Not even close. And I'm not going down that path of sky-is-falling bullshit until I see it happen. You sound like the democrats when Trump got elected. They thought WWIII was right around the corner and neo-nazi "Trump Youth" would start taking over acting like the mafia. Nothing even close to that happened.

 

[DBS1970]

Hopefully Burgandy will be along soon to explain how international trade and currency works. Inflation matters in a relative sense, to other currencies, commodity prices, etc. For example, if the US has 10% inflation but Germany has 20% inflation, the USD will strengthen relative to the Euro. So the US imports will be cheaper, and exports lesser....which is why the Germans gave up the DMark and embraced the wasteful French and Italians more than two decades ago.

Yeah Burgundy liked my post which means he agrees with me. We are on our way to Weimar Germany style Hyperinflation. That’s not good no mater how you spin it and it can’t be rationalized.

 

[Djfan]

Well, DJ, I think you are kind of too far down the rabbit hole. But to each his own.

I still think Trump lost. I still think Republicans will win the mid term elections and re-take the Senate, if not the House if inflation is bad enough. While I am certainly an enemy of globalization to the point of open borders, free trade would be great if other countries lived up to what we espouse and offer. But they just take advantage of our generosity, so I say **** 'em for a while. It's not good for us, but it's WORSE for them. And I truly believe the only way to change the cheating ways of other countries is to stand up to them, call their bluffs and wait them out. We can afford it. They can't.

Democrats have fallen so far back into their old tax-and-spend policies it's almost comical how easy it is to call them out on it. I just have to hope there are enough voters smart enough to see how bad tax-and-spend is that it makes a difference. I think people over 40 know it in their hearts and they are the ones that vote. And anyone that lived through Jimmy Carter should clearly see the similarities already.

Don't give up. I just don't believe it's as bad as you say. Not even close. And I'm not going down that path of sky-is-falling bullshit until I see it happen. You sound like the democrats when Trump got elected. They thought WWIII was right around the corner and neo-nazi "Trump Youth" would start taking over acting like the mafia. Nothing even close to that happened.

I genuinely hope that I am wrong. Just know that my deep place was here before the Biden show came to town. I've been saying that the show is over for many years. These things just take time to manifest.

I still vote. I still speak up. I volunteer for things. I'm not going away, and I'm not done. I just think that we are functioning in the last bit of this nation.

The libs are ok with the globalists and huge government nonsense. The media and education agree. That means that the smurfs will all come out to teach the loveliness of all that nonsense and sheep will believe it. As long as that continues, we are marching down the road of self destruction.

 

[Steelr4evr]

I can only speak for myself here. I am convinced that the undoing of this formerly great nation is the goal, and many politicians are complicit. I believe it is planned, and being pursued actively. I am also convinced that Biden is a puppet in the game, being incapable of farting without help and direction. There is a lot of power and money to be gained by the players, and some puppets are deceived into thinking that they will be rewarded with both power and money. That is why they play along.

Just my two cents. But, I really believe this.

Degrade and destroy society as we know it. Attack the foundation it was built on, blame certain groups, divide by race,social class, and go over the top about sex. Good grief they're letting men call themselves women and compete against them. Talk about a war on women? Real women. Not mentally ill people playing dress-up and genital mutilation. Which if anyone does research on that, will find it a perverted horror show.

We're absolutely being pushed into marxism and communism. It only takes a look at the entire education system to figure that out. A LOT of youth are a ok with it.

President Barry told us fundamental change was coming. Trump ****** that up for 4 years. Now they're full steam ahead. You noticed how they basically came in with an executive hammer when the Imposter got sworn in. Absolutely nothing done was for the benefit of this country. The focus on a bunch of divisive bs.Just a horrible lot of people with no redeemable qualities.

Now dementia Joe is back to quietly building the wall. With his own contractors. Slick.

They'll get back to building the pipeline shortly as well.

 

[wig]

I still think Trump lost.

With everything coming out in AZ, NH, PA, GA and even WI I honestly don't know how you can possibly believe that. ****, I forgot MI.
Their fraud is completely falling apart with the lightest scrutiny. They were so desperate to win they didn't even make rudimentary efforts to hide what they did. It's coming out and I can't believe you aren't paying any attention to all of it. I just can't believe that.

 

[Steeltime]

The Republicans don't even NEED Trump if the economy starts to hyper inflate and interest rates go back up to 5-6%.

The "real" interest rate for consumer loans, even those backed by collateral such as a home or car, is 2.0%. That means interest runs at inflation + 2.0%. So we don't need hyperinflation to reach 6% or 7% consumer interest, we need just 4.5% inflation.

Which is here.

The Fed is trying to stem the rise in interest rates by keeping the prime rate below market at 1.5% or so meaning that lenders can get money cheaply and can then loan at this artificially low rate plus 2.0% real interest rate.

The government is simply borrowing directly from the Fed for the trillions in additional spending. The amount of money in the market, foreign and domestic, is so massive that it takes a while for the inflationary effect to take hold. However, direct borrowing for spending with no increase in revenues or goods to back it up is a card trick that inevitably fails.

Financing its debt via direct borrowing from the Fed rather than through bond sales is called "monetizing the debt," or "printing press financing." By monetizing the debt, the Fed will invariably trigger inflation since the supply of money increases with no concurrent increase in assets or products to account for that increase in the money supply. When you increase the supply of money while the supply of products for that currency is stable, then the amount of money needed to obtain the goods or services goes up - inflation.

Hopefully Burgandy will be along soon to explain how international trade and currency works. Inflation matters in a relative sense, to other currencies, commodity prices, etc. For example, if the US has 10% inflation but Germany has 20% inflation, the USD will strengthen relative to the Euro. So the US imports will be cheaper, and exports lesser....which is why the Germans gave up the DMark and embraced the wasteful French and Italians more than two decades ago.

Using the differing values of currency for gain is something called "arbitrage." Arbitrage is designed to take advantage of the very thing you are talking about, but the problem is that the possible increase in American exports stemming from a more stable currency presumes (1) the United States has a controlled approach in its spending to avoid significant inflation as noted above (we don't), (2) other nations are engaging in the rampant debt monetizing we are (they're not), and (3) foreign nations allow some semblance of open competition in their markets for imports from the United States (they don't).

 

[MT~Forged]

As someone who has almost completely cut off spending since the Wuhu Flu event, I am sitting on a pile of cash of which I have NEVER seen. Getting those ******* who can’t seem to understand that you can’t spend more then you make, to pay higher interest rates, works for me. Yes, everything is going up, but we have taken steps to offset much of that. We no longer go out to eat, raise 3-4 times the food we used to, and even got the old VW rabbit diesel back on the road. The VW is getting almost 48 mpg, saving us a fair bit of fundage on that alone.