Fed Raises US Rates by a Quarter Point, Signaling Possible Pause (bloomberg.com) 114
The Federal Reserve raised interest rates by a quarter percentage point and hinted it may be the final move in the most aggressive tightening campaign since the 1980s as economic risks mount. From a report: "The committee will closely monitor incoming information and assess the implications for monetary policy," the Federal Open Market Committee said in a statement Wednesday. It omitted a line from its previous statement in March that said the committee "anticipates that some additional policy firming may be appropriate." Instead, the FOMC will take into account various factors "in determining the extent to which additional policy firming may be appropriate." The increase lifted the Fed's benchmark federal funds rate to a target range of 5% to 5.25%, the highest level since 2007, up from nearly zero early last year. The vote was unanimous. US equities maintained gains, while Treasury yields and the dollar declined.
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Maybe those people should just learn to code, right?
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Rich guy comes out in favor of putting the boot to the necks of the working class.
That's a real surprising take you relayed there from your broker.
Re:Powell wants a recession (Score:5, Informative)
He doesn't want a recession. He wants 2% inflation. Inflation targeting is the current consensus among central bankers. It just so happens that in the current climate, getting us to 2% inflation is really hard to do without inducing a recession.
I'm not arguing one way or another about the concept of inflation targeting or the specific value. Smarter economic minds than me have come up with all this. I'm just telling you what I've heard.
AFAIK, the notion of an inflation target, generally shared among developed nations is a kind of replacement for Bretton Woods and fixed exchange rates. The idea is to keep inflation generally the same in between trading partners so that you don't get too much trade imbalance.
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My high yield savings accounts are loving this right now.....
It's been so long since savings accounts actually paid interest, it's nice to have that again.
Is that gonna get you (Score:2)
If you're retired I get it. One of the major problems we have is a huge number of people disconnected from the working economy. e.g. with no reason to care if anyone has a job.
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If you're retired I get it. One of the major problems we have is a huge number of people disconnected from the working economy. e.g. with no reason to care if anyone has a job.
Like who? Just because somebody has a higher standard of living than you, which is basically...everybody...doesn't mean they don't work for a living.
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I can't invest everything, I need to keep some fund liquid...you know 6mos to a year's worth of income for emergencies...I have that and a bit more in high yield savings accounts.
I grew up in the day when it was normal to have good interest rates on regular savings accounts, it encouraged saving.
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If you're patient and don't need the money right away, look in to I-bonds. There's a $10k limit per person, subject to a little finagling--you can legally go $20k per couple, and I think you can also legally hit the limit with at least one LLC. Of course having $30k of money you don't need right away and not getting enough return is a "good problem to have". Those I-bonds were yielding around 9% when I did it, and are probably still up there for now.
The downside is that watching for semi-annual credits
Re:Powell wants a recession (Score:4, Interesting)
Inflation is mostly an internal metric. It doesn't affect exchange rates as much as you might think. Targeting two percent inflation is to provide predictable prices and stability, which lets everyone plan more effectively and makes economies more efficient.
A high inflation rate encourages spending and investing while a low one encourages saving. Positive inflation provides an incentive not to hoard money, but keeping it low doesn't discourage sensible saving and doesn't push people into wild investment.
I'm not saying I'm in favor of inflation (Score:2)
He's been hiking rates for months now. How's that inflation thing going? When does he stop? 10%? 20% 70%
How many Americans need to lose their jobs? Powell says 2 million. History says another 1.5 million will follow. Powell has no plan to stop the layoffs when they start.
You speak about all this like it doesn't affect you. If you're retired maybe you're right. But most of us here still wo
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Increasing interest rates decreases inflation. There's a lot of experience behind that observation. Yes, it's unpleasant. Not doing anything tends to be more unpleasant.
The world has had a zero interest rate free money party going for the last twelve or thirteen years. Now it's hangover time. Welcome to reality. The time to complain was a decade ago; today the options range between "painful" and "oh shit." If you're struggling with a ~5% interest rate on a mortgage or something, which is still among the low
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Inflation rate for the last year as of:
August 2022: 10.8%
September 2022: 8.8%
October 2022: 6.5%
November 2022: 6.2%
December 2022: 3.7%
January 2023: 0.3%
February 2023: 2.0%
March 2023: 3.2%
April 2023: 3.4%
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Oops, that's actually the annualized rate over the last six months as of the given date.
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"Hoarding money" is what people used to call "saving for the future".
The existence of the Federal Reserve and fractional reserve banking effectively makes that an impossibility.
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No, hoarding money is doing things like sticking it in your mattress. That money becomes unproductive.
Investing, or putting your money in a bank (so they can invest it) is not hoarding. The money is used for productive purposes.
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Considering we've been in a recession since July of last year (by historic metrics), and there's economic tightening everywhere while prices continue to rise, it's unlikely they'll be able to achieve anything close to 2% inflation or avoid recession. Very slim odds.
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No, he does not want a recession. Fed R. is trying to get a "soft landing", such that GDP may skim around 0% growth for a while (to curb inflation), but hopefully not go negative.
History shows it's not easy, though. We'll need luck to avoid a recession. Controlling the econ through interest rates is kind of like driving a truck where the steering has a 5 second latency. If you anticipate wrong, you end up inside an apartment building.
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There's no such thing as a soft economic landing. And there's absolutely zero possibility of no recession upcoming. We had one last summer, under the classic definition, which was then changed by the media in order to keep the current president from looking bad.
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There's no such thing as a soft economic landing. And there's absolutely zero possibility of no recession upcoming. We had one last summer, under the classic definition, which was then changed by the media in order to keep the current president from looking bad.
It's been painful for a couple of years now (looked at your grocery store bill lately?), but it's going to get much, much more painful. And it's completely necessary. We're dangerously close to the kind of 70's style Stagflation that we thought was a historical one-off. It took Paul Volcker's cold-blooded rate raises to get it under control. There's simply no other way to do it, and it's going to hurt. A lot. So prepare accordingly.
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Maybe we shouldn't have given the banksters what amounts to unlimited free money for close to 10 of the last 13 years.
Why? (Score:2)
And you know what I mean when I say "recession". I mean a long period of austerity measures for working class folk. Lower pay, longer hours, belt tightening for anyone that makes under $1 mil/yr. People losing their houses and cars. That's what is being engineered here, and has been every 10 years since I was a lad, and I'm old
We know exactly what to do to stop this crap. We did it post WWII and
Re: Why? (Score:2)
WTF do you mean you're old? You're the one always talking about my generation (referring to me specifically) being out of voting age soon despite the fact that I was born in 1982, basically the beginning of what's commonly referred to as the millennials, and nowhere close to retirement, let alone voting age.
And who is "us"? I've never had the rug pulled out from me by anybody except from my own personal health issues, and despite which I'm doing pretty well thank you very much. Sure, I don't make a million
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And there's absolutely zero possibility of no recession upcoming
The US GDP grew by 1.1% during the first quarter (and yes, this is the inflation-adjusted GDP growth rate). The inflation was down to 4.2%
Inflation is expected to drop to 3.5% by the end of Q2. The expectation is 3% by the end of 2023, with the current policies. It's still higher than the target 2%, but it's not catastrophically higher.
So what is going to be the trigger for the recession?
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> And there's absolutely zero possibility of no recession upcoming.
Sure, if one waits long enough, they come around anyhow. AKA Business Cycle.
> was then changed by the media in order to keep the current president from looking bad.
You are full of shit.
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One of the core values of the left is that everyone should be equal (except themselves).
The core value of the left in the US is equal opportunity, not that everyone should be equal. This generally means advocating for equity in society and not just equality. The difference being that equality is everyone being treated the same (which advantages those who already have advantages), while equity is understanding people with different circumstances need to be treated differently to provide meaningful equality of opportunity. Your statement is just a weak right wing strawman.
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The Left in the US is sure not about the little guy. They are about creating racial divides and kicking back while cities burn, pushing on issues nobody cares about, pushing their party line that they know loses (For example, Beto campaigning for scorched-earth, Venezuela like gun bans in Texas, when he could have focused on legalizing marijuana, which would have gotten him a win, even from the right.) They are about their politics and nothing else. You get a Dem in office, and they want your gun, your c
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Neither US party wants change. The Dems want your slice of the pie, the Republicans shrink the total pie. The Libertarians think the pie should be gotten rid of and everyone go back to milling their own wheat. There is no real "left"... a sane left, like you find in Europe or other civilized countries. At best, you have center-right.
Your last statement is very accurate. The Democratic party barely pays lip service to the left, which leads to a lot of "what have you ever done for me" sentiment among those who would most benefit from a leftist ideology. And when this leads to low voter turnout or even voting for right leaning populists it becomes a very dangerous mentality that holds back change. It trades away the possibility for limited change and replaces it with no change (or regressive change recently in the US).
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Re: Powell wants a recession (Score:1)
You are getting the definitions of these terms very wrong. Equality is equal treatment, and equity is equal opportunity. Neither are equal outcome. That is a right wing strawman argument.
Re: Powell wants a recession (Score:5, Interesting)
The left is acknowledging that not everyone has the same starting point, so more for those who has less ends up in a more equal outcome, given equal work.
The other way is to acknowledge that some have a head start given to them by others, and to give THEM more, ensuring they continue pulling ahead of other Americans.
If you arenâ(TM)t already rich, you arenâ(TM)t part of that group, and you never will be. You may be doing alright, but that will dwindle in time as those with more, continue to take higher percentages out of the economy, at the expense of the rest.
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You are confused. The Right supports equal opportunity. The Left demands equal outcomes.
The right does not support equal opportunity. The most generous statement would be they support equality, which is treating everyone the same regardless of circumstance. You can see this in their stance on affirmative action. This approach does not lead to equal opportunity, because some are born into more privilege than others.
The left supports equal opportunity through equity, or at least a constant improvement in equal opportunity (it would be realistically impossible for complete equality of opportunity
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Equity has been redefined by the Progressive mind virus to mean Communism.
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> The Right supports equal opportunity.
Anyone who's been in the workplace a few decades learns that merit is only half the equation. Social factors play the other half, and race & ethnicity are a big part of that.
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He doesn't care whether you (the common you) lose your job. He cares about the same thing all people currently in power care about. Wealth consolidation. This will wipe out yet more small businesses, and take yet more money out of the general pool where it's within reach of the middle class and lower class and put it squarely into the greedy hands of the "already have plenty class."
THAT is all he cares about, no matter how he tries to spin it.
Re:Powell wants a recession (Score:4, Interesting)
Powell's job is to protect the value of the dollar, nothing else. It is not his job to:
Ensure competition
Stop monopolies
Provide jobs
Prop up zombie banks and other businesses
If you desire these things, look to Congress, not the Fed. Higher rates are a symptom of an irresponsible government.
No, his job is to run our banking system (Score:2)
Maybe you won't lose your job in Powell's recession, but you'll stop getting promotions and pay raises. More work, more responsibility. But no promotions or pay raises. The entire point of what he's doing is to reduce the value of labor. He's admitting that himself. The only question is do you believe his reasons *why* he's do
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that's what the Federal Reserve does. And he's stepping outside that and into politics.
How, exactly?
Maybe you won't lose your job in Powell's recession
This has been in the works since way before Powell even had that job, and then amplified by COVID. Any idiot could have seen this coming the moment those stimulus checks went out and we started talking about student loan forgiveness. We already had high inflation even then, and those only stoke the flames even more. Combine that with the mass business closures, and you've got a perfect recipe for stagflation. I remember saying as much (pretty sure it was right here on slashdot as well as other
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Budweiser stock (Score:2)
Bud's stock doing just fine. Anti-LGBTQ+ troglodytes are dying off anyhow, not a market worth trying to keep.
The Dylan Mulvaney thing is only recent, since April 1st. While the stock took a hit, it seemingly bounced back, so that any variation is probably in the normal range of noise.
We really won't know the results for awhile. Sales have *reportedly* dropped over 20%, and this won't be reflected in the financials until the next quarterly report, about another 3 months or so. The stock price won't be affected until just before the quarterly report (because analysts will start predicting things a few days ahead of
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> The Dylan thing was the dumbest thing I've ever seen grown me get upset at.
To be fair that prize clearly goes to the Cocoa Krispies mascot removal. But if that doesn't hit your threshold for outrage then Aunt Jemima is second.
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Those are also indeed pretty silly.
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It's simple really....for some reason, Budweiser simply somehow forgot who their target audience for their product is.
M
Re: Budweiser stock (Score:2, Interesting)
"NO guy wants to order a beer and instantly have friends and strangers in a bar come up and start poking fun questioning his masculinity."
Men don't care about shit like that unless they are unsure of their masculinity. A bit like the gay bathroom Republicans.
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Yes, they do.
No one likes being insulted...
It has nothing to do with being "unsure"...we just don't like shit like that being pushed on us.
We don't like to be insulted, no one does.
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Oh, so now it's being "insulted"...
Sounds to me like you're definitely touchy about the subject for some reason.
Personally, I don't care if you're straight, gay, trans, bi, or Martian. And all of those folk make up a significant percentage of the population and all of them may buy the same beer, wear the same clothes, and drive the same oversized pickup trucks.
Why take it personally when a company decides it wants to appeal to a broader audience? It's just business.
(Okay, I changed my mind. I might worry a
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Err...not really.
Straight males, overwhelmingly the majority.
Gays...not that many, but I'll grant you, statistically significant.
Bi? If you are a guy and suck a dick, I don't care if you occasionally dabble with women, you're gay.
Trans...statstically not even a blip...which really makes me wonder why this is pushed on us so heavily by the left these days...t
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Don't get your panties in a wad....
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Re: Budweiser stock (Score:2)
You're not much of a man then. Maybe a man-child. But society doesn't see you as a man if you flip out over a ribbing.
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If I was drinking a Bud Light in a bar and some guy came up to me to make fun, I'd simply say "guess it takes one to know one" and be done with it. If a buddy said something like that, I'd give a sarcastic "har har" and immediately move on. Seriously, anyone going out of their way to make fun of a stranger at a bar is a complete fuckup to begin with. They didn't need this excuse to do somet
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It's like blaming Marissa Mayer for Yahoo's failure. Yahoo was already toast before hiring her. She didn't save it but it was already a lost cause.
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As somebody nearby pointed out, Bud has been a Gay Pride sponsor for a while. The sudden publicity was a random viral incident.
> Disney pulled its exec and brought Bob Iger out of retirement for apparently the same reason, and this might indicate that Disney is changing course as well.
Iger told Ron S. off.
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Correction, Ron D., Governor of FL.
Re: Powell wants a recession (Score:2)
Oh look, the SJW is proposing Cancel Culture. ;)
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Re: Powell wants a recession (Score:2)
Hey I'm just tellin' it like it is. That's a virtue, right?
Wrong direction (Score:1, Insightful)
The oligarchy in the US needs a cycle of unemployment to transfer wealth from the middle class to the ultra rich. They haven't done one in a while and they are getting impatient for their due.
No way thats the final move. (Score:2, Interesting)
What is a haircut in finance? [investopedia.com]
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I'm not sure these are the alternatives. It may be that the bank failures and stalled economy are together one branch. The alternative branch may be galloping inflation and a very precarious situation with US Government debt.
Muddle through is still a possibility, though I admit to not seeing how. Its getting serious though.
Re:No way thats the final move. (Score:4, Insightful)
The fact that a trade settlement company is not allowing borrowing banks to use a lending bank's equity as a collateral for a loan from the lending bank does not mean the banks "lost nearly all their collateral." In fact, the banks did not lose anything at all. Please do not spread misinformation.
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You wrote:
None of the securities they own have can be used for collateral.
That is not true and actually doesn't even make sense to say since the banks whose securities are used as collateral are the lenders to and not borrowers from the applicable line of credit:
Pursuant to the LOC Agreement, securities issued by an affiliate of any Lender (âoeLender Family Issued Securitiesâ or âoeLender FISâ) are excluded as eligible collateral for securing a draw on the facility.
Banks lending money to a pool didn't want their own equity securities used as collateral by borrowers from that pool, so the lending banks set the collateral value of their own stock to zero. This isn't some indication that the banks lending money to the pool are not creditworthy; it's just how the lending bank
We could just muddle through, but.... (Score:2, Insightful)
We could just muddle through, this is what usually happens. But there is also a much darker possible scenario. its entirely driven by the rise in interest rates.
This one goes, you have lots of smaller banks with heavy exposure to commercial real estate in the form of loans issued to their owners. The owners are in trouble because of falling occupancy rates. They also are in trouble because they need to roll over their debt, and it will be at high enough interest rates that it will make them unprofitable
Re: We could just muddle through, but.... (Score:2)
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At some point in this a government decides to abolish fossil fuels, and replace the electricity generating infrastructure with wind and solar, and to make all cars and trucks EVs. And try to phase out gas heating and cooking. What could possibly go wrong with that? It will just run a slightly large deficit, which will be funded by selling bonds. Always worked in the past, why not now?
All the more reason why we the people should support rate increase AND hope the debt ceiling does not get raised. The full faith and credit of the united states shall not be questioned, so there will be no 'default' all payments and bonds will be honnored eventually because constitutionally they must be.
However until they are nobody will lend Uncle Sam money. Its the surest way to stop the progressive agenda once and for all and prevent the theft of familiar wealth by the state to blow on bullshit social e
Re: We could just muddle through, but.... (Score:5, Insightful)
Not raising the debt ceiling is a bit like trying to balance your home budget by deciding one day out of the blue that you're just not going to pay your rent and child support bills. It's foolish.
Ignoring for a second that thinking of the solvency of a nation state with a fiat currency as though it were kitchen table economics is a huge fallacy, the answer to reducing deficits has to be a structured approach. It cannot be a politically charged tantrum by a fringe minority holding a mostly incompetent house speaker hostage.
If you ask me the clear answer to lowering inflation and reducing the deficit is raising taxes. Pull back some of the money dump that started with the feds QE a decade ago, and was made worse by the trump tax cut bonanza and the covid free money. I can think of no worse solution than allowing a default to permanently raise borrowing costs for the federal government. Because the debt limit will certainly get raised when grandma doesn't get her social security check, or farmers can't sell their crops because staff at the USDA got furloughed and they cant legally navigate the export process. And when the limit does get raised, if it was allowed to default first, you're still out the money you owe AND it'll be harder to dig yourself out in the future. It's somehow the dumbest of all options.
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My own take is this is an emerging property of extreme wealth inequality (and for those who break out M1 charts, let's not forget where 70% of those funds went).
I works like this: if you have so much capital you've already saturated most primary markets for investment, you start looking for secondary and even riskier vehicles for investment. It is literally capital competing against itself for investment vehicles, which looks very similar to but operates very differently from an inflated money supply.
And yo
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The latest news from the bank sector makes muddling through seem less likely.
https://www.zerohedge.com/mark... [zerohedge.com]
Yes, I know its ZH, but this is pretty straight reporting and the number of instances of trouble is getting too large for comfort. Also, the strength of the reaction to rumors is getting too strong for comfort.
A genuine full on financial panic is getting to seem a real possibility. And I find it hard to see what exactly the Fed or the Administration is going to do. Any short term remedies have su
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Until the market goes down it's not enough. The market is still going up as the insanity persists. Interest rates should be similar to the 80's. Companies have a death grip on their overinflated artificial worth. This is all fueled by the "dotbomb" mentality since the 90's.
Yes, a lot of dumbass companies and investors will fold but the chaff needs to be eliminated. People harp and complain about things like Bitcoin but the fact is, the stock market might be worse.
Right now the Fed Funds Rate is at the same level as it was in 2007-2008 during the Great Real Estate Crash.
And mortgage rates have plummeted! (Score:2)
It's the pause (Score:2)
They are Confusing Inflation with Shortages (Score:2)
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What we are seeing isn't traditional inflation, it's price hikes caused by part and fuel shortages.
No shortages of fuel where I live. No lines at the gas station pumps. No signs of the Army escorting fuel tankers from the refineries to gas stations. It sure isn't 1973 here.
There is a shortage of public EV chargers around here. Does that count?
Greed (Score:5, Insightful)
I guess the federal reserve increasing the money supply from $4 trillion to $20 trillion in two years, with the federal government handing most of that money directly to consumers, along with a stagnant economy and constrained supply chains, all had absolutely nothing to do with inflation. It's just corporations increasing prices on stuff.
https://fred.stlouisfed.org/se... [stlouisfed.org]
Re:Greed (Score:5, Insightful)
It's just corporations increasing prices on stuff.
Why would they be raising prices at a greater rate than their costs?
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It's just corporations increasing prices on stuff.
Why would they be raising prices at a greater rate than their costs?
Well, greed is infinite, so the answer to why is because they can.
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Well, greed is infinite, so the answer to why is because they can.
We have a winner!
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It's just corporations increasing prices on stuff.
Why would they be raising prices at a greater rate than their costs?
Can you prove you statement? citations please
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Read the fucking links I posted.
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Thanks for the link. Heck, M1 tripled in like only three months.
What's interesting to me is the relationship between M1 and M2 (https://fred.stlouisfed.org/series/M2SL).
I am not an economist (IANAE...?) but just looking at the graph it seems like most of that money that was pumped into the money supply for Covid just went into people's savings, versus say having it be immediately spent in the economy. People flush with savings are able to bid up the prices of things they purchase until their savings are
Consumers? (Score:3)
They're picking your pocket and robbing you blind, then they use the money they stole to rack up the national debt and jack up the prices you pay at the companies they bought with *your* money. Why the hell aren't you outraged? Why are you blaming consumers? Jeez....
Re:Greed (Score:5, Interesting)
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I guess the federal reserve increasing the money supply from $4 trillion to $20 trillion in two years, with the federal government handing most of that money directly to consumers
Bolded by me. What. The. Fuck. Are. You. Talking. About.
A $1500 payout to some folks is definitely NOT handing most of that money to consumers... so where are you getting this information from and what exactly does it say? How do you figure anything more than a fraction of a percent went to consumers? Maybe I just did not understand your meaning. Please clarify.
Actually, I just did the math and increasing the money supply by 16 trillion dollars took $44k in value from each and every person in the United Sta
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