I found a theory on the internet explaining how the FED is likely to be stuck with inflation: no way out. The author explains that since the FED is playing a game of push and pull with QE and their Reverse Repo Program, it needs to keep rates down. Otherwise money that they have thrown into markets with QE, and that Peter Schiff predicted would cause inflation, but hasn't, because they pulled it back, yes that money, it would actually have somewhere else to go (they would not be able to pull it in) and therefore create inflation. As long as that "money" was not being spent obviously it created no inflation.
So precisely their tool (interest rates) to fight inflation would "open the floodgates" and create even MOAR inflation! There is about $1 trillion sitting around just waiting to get spent. And it does not end here, I can add to this theory that higher rates would basically destroy the US government: The national debt is now at 128% of GDP, or 28.5 trillion usd! It was at 53% in 1960, 35% in 1980 back when there was big inflation and big rates as a result, and 55% in 2000. The government can't pay its debt even if it taxed "the rich" - these magical beings that are said to have the power to solve everything with their infinite money - at a rate of 9000%.
Higher rates would create huge deficits, and how do they always deal with those? MOAR QE! And that QE money would go where? MOAR inflation. And how would they fight inflation? MOAR rates. And what do these cause to go up? MOAR US national debt repayments. And how do they solve this? MOAR QE! Even if people are incentivized to save their cash rather than spend it (including in stocks and real estate) they'll never save 100% of it, so at least some of the QE will create inflation.
Much of the money the US owes is owed to boomers, it's their retirement fund, and they are not going to save it for their old age now, they will spend it.
A major obstacle to fighting inflation is QE, if they want to stop or slow rising prices and they cannot pull back let's call it the "surplus" of what they print they have to stop pumping out monopoly bills. But not only do these magic beans printed out of thin air support the US government, they also support the stock market. And there is 1 thing the US fears more than high inflation it is a stock market collapse. Because they believe that bad things happen when the stock market jumps down. On the other side of the pond Germany does not care much about their stock market but are terrified of inflation. They can't both be right, clearly they are biased, but the truth does not matter, what the FED and other people in charge believe is what matters.
Value investors won't support the stock market or real estate at these stupid prices. Retail gamblers are irrelevant trolls and make bubbles even worse. Only reason stocks go up other than QE is all the buyback programs. Maybe buyback programs could be enough to keep the stock markets from falling? Only one way to find out. I don't think they want to find out. With retail recently entering into the game and gambling their QE stimulus checks, it could be too much for buybacks to support alone, because yes they would be alone since retail would stop getting stimulus checks, unless the government takes even more debt which is even worse. Either way... Checkmate.
Bad things happened in 1929 after the stock market crash. Back in 1929 Germany relied on the USA, today half the planet does. African presidents are already antisemitic and openly admit gays disgust them, so what could possibly go wrong? Islamic terrorist organisations are licking their lips and prediction the US collapses soon (and will stop getting in their way). Americans never want to go through a depression. So they will continue to "support" the economy. But that which "worked" in 2009 is not working anymore. A few credulous clowns believe the "transitory" lie. Lol. Come on.
Americans (the bankers etc, the ones in charge) believe in progress and so on, and that bad things happening are a coïncidence and that everything will be fine eventually, but the rest of the world does not. Russia which is abandoning the USD says the USA is behaving in an "absurd" manner and reminds them of the last years of the Soviet Union. They are motivating other small countries to follow them and also a big one, China, that was already worried and started trying to move away from the USD. In 2020 China started plans to create a south asian economic zone that would not use the USD.
China is economically "taking over" Africa, and Russia is making military successes and kicking out France, an obscure US unincorporated territory.
10 years ago Washington and Paris killed Gaddafi and destroyed Libya after he started a rivalry endangering the US dollar and the CFA Franc as well as the west influence more generally. But good luck kicking out Russia & China like they did with Libya.
The 15 African countries (150 millionish people) using the CFA Franc are moving to "Eco" (Although I think it will still be pegged to the Franc hence the Euro, at least for a time). The USA, and France are now shouting "Hurray" in a spirit of decolonialism and anti-racism. It was first announced and celebrated 6 years after Ghadaffi death I think. Damn, so much for that. Only a matter of time till Africans get rid of the american pyramid scheme. Poor broke countries like Angola are net exporters and USD bagholders. They're not big, but there is a lot of them, and their small GDP does not reflect the cheap labor and cheap raw materials the west gets from them. Goodbye colonial currencies. It already started with the Franc CFA. The USD is next. And soon. I mean China panicked and almost ran away for the exits last year, and now things are worse.
East Asia and Africa are as good as gone. Mexico and West Europe are the USA dogs. South America is America baby factory. Russia influence in east Europe, the caucasus and central asia is heavily challenged by the west, although west Europe going full covid fear mode and the USA pulling out of Afghanistan will give Russia more breathing room to do what they did in Georgia and Ukraine. The west heavy pressure on Russia, part of the reason why they went to Africa kek.
China built its economy around copy pasting western factories and ideas, and exporting to the USA.
But now the west top ideas are "put toilet paper mask" or "trust spaceX what a surprise they didn't deliver let's rent form the Russians again", they are laughed at by the whole world, their "science" is pathetic and China is even conquering space. China has this east asia economic area thing, their OBOR/BRI project, and Africa for trade in general (getting what they need and sending what they make and economic incentives). It's a big continent, poor, but lots of potential. West Africans have a history of long distance trade due to their geography/isolation. Young South African countries like Zimbabwe can't run an economy but China can (sort of) and colons already showed what is possible.
The west is shrinking, and the rest of the world just doesn't need them, they don't need the USD. The exporting of inflation comes to an end.
So precisely their tool (interest rates) to fight inflation would "open the floodgates" and create even MOAR inflation! There is about $1 trillion sitting around just waiting to get spent. And it does not end here, I can add to this theory that higher rates would basically destroy the US government: The national debt is now at 128% of GDP, or 28.5 trillion usd! It was at 53% in 1960, 35% in 1980 back when there was big inflation and big rates as a result, and 55% in 2000. The government can't pay its debt even if it taxed "the rich" - these magical beings that are said to have the power to solve everything with their infinite money - at a rate of 9000%.
Higher rates would create huge deficits, and how do they always deal with those? MOAR QE! And that QE money would go where? MOAR inflation. And how would they fight inflation? MOAR rates. And what do these cause to go up? MOAR US national debt repayments. And how do they solve this? MOAR QE! Even if people are incentivized to save their cash rather than spend it (including in stocks and real estate) they'll never save 100% of it, so at least some of the QE will create inflation.
Much of the money the US owes is owed to boomers, it's their retirement fund, and they are not going to save it for their old age now, they will spend it.
A major obstacle to fighting inflation is QE, if they want to stop or slow rising prices and they cannot pull back let's call it the "surplus" of what they print they have to stop pumping out monopoly bills. But not only do these magic beans printed out of thin air support the US government, they also support the stock market. And there is 1 thing the US fears more than high inflation it is a stock market collapse. Because they believe that bad things happen when the stock market jumps down. On the other side of the pond Germany does not care much about their stock market but are terrified of inflation. They can't both be right, clearly they are biased, but the truth does not matter, what the FED and other people in charge believe is what matters.
Value investors won't support the stock market or real estate at these stupid prices. Retail gamblers are irrelevant trolls and make bubbles even worse. Only reason stocks go up other than QE is all the buyback programs. Maybe buyback programs could be enough to keep the stock markets from falling? Only one way to find out. I don't think they want to find out. With retail recently entering into the game and gambling their QE stimulus checks, it could be too much for buybacks to support alone, because yes they would be alone since retail would stop getting stimulus checks, unless the government takes even more debt which is even worse. Either way... Checkmate.
Bad things happened in 1929 after the stock market crash. Back in 1929 Germany relied on the USA, today half the planet does. African presidents are already antisemitic and openly admit gays disgust them, so what could possibly go wrong? Islamic terrorist organisations are licking their lips and prediction the US collapses soon (and will stop getting in their way). Americans never want to go through a depression. So they will continue to "support" the economy. But that which "worked" in 2009 is not working anymore. A few credulous clowns believe the "transitory" lie. Lol. Come on.
Americans (the bankers etc, the ones in charge) believe in progress and so on, and that bad things happening are a coïncidence and that everything will be fine eventually, but the rest of the world does not. Russia which is abandoning the USD says the USA is behaving in an "absurd" manner and reminds them of the last years of the Soviet Union. They are motivating other small countries to follow them and also a big one, China, that was already worried and started trying to move away from the USD. In 2020 China started plans to create a south asian economic zone that would not use the USD.
China is economically "taking over" Africa, and Russia is making military successes and kicking out France, an obscure US unincorporated territory.
10 years ago Washington and Paris killed Gaddafi and destroyed Libya after he started a rivalry endangering the US dollar and the CFA Franc as well as the west influence more generally. But good luck kicking out Russia & China like they did with Libya.
The 15 African countries (150 millionish people) using the CFA Franc are moving to "Eco" (Although I think it will still be pegged to the Franc hence the Euro, at least for a time). The USA, and France are now shouting "Hurray" in a spirit of decolonialism and anti-racism. It was first announced and celebrated 6 years after Ghadaffi death I think. Damn, so much for that. Only a matter of time till Africans get rid of the american pyramid scheme. Poor broke countries like Angola are net exporters and USD bagholders. They're not big, but there is a lot of them, and their small GDP does not reflect the cheap labor and cheap raw materials the west gets from them. Goodbye colonial currencies. It already started with the Franc CFA. The USD is next. And soon. I mean China panicked and almost ran away for the exits last year, and now things are worse.
East Asia and Africa are as good as gone. Mexico and West Europe are the USA dogs. South America is America baby factory. Russia influence in east Europe, the caucasus and central asia is heavily challenged by the west, although west Europe going full covid fear mode and the USA pulling out of Afghanistan will give Russia more breathing room to do what they did in Georgia and Ukraine. The west heavy pressure on Russia, part of the reason why they went to Africa kek.
China built its economy around copy pasting western factories and ideas, and exporting to the USA.
But now the west top ideas are "put toilet paper mask" or "trust spaceX what a surprise they didn't deliver let's rent form the Russians again", they are laughed at by the whole world, their "science" is pathetic and China is even conquering space. China has this east asia economic area thing, their OBOR/BRI project, and Africa for trade in general (getting what they need and sending what they make and economic incentives). It's a big continent, poor, but lots of potential. West Africans have a history of long distance trade due to their geography/isolation. Young South African countries like Zimbabwe can't run an economy but China can (sort of) and colons already showed what is possible.
The west is shrinking, and the rest of the world just doesn't need them, they don't need the USD. The exporting of inflation comes to an end.