Thesis: Rate hikes are the future, we need a stronger US Dollar.
"And I will fasten him as a nail in a sure place; and he shall be for a glorious throne to his fathers house." -Isaiah 22:23
I feel compelled to address the US dollar, my publication is a thesis not an idea (I have already published an informal expose under the SP500 which I will attach below).
I remeber it was only about a decade ago a 24oz of soda cost $1.25 in the vending machine, the last time I bought a soda from a vending machine it cost about $1.75, and even at places like Walmart it's around $1.59 before tax. Our economy is inflated, I read in the news the other day that President Trump stated that a strong dollar is hurting the economy, and I imagine he is referring to the effect it has on exports. However I believe that a strong dollar is the future of the USA, I believe the USA is in business to make our dollar as valuable as gold, as good as gold. Our business is turning paper into gold. How could it be possible? The dollar was once backed by gold and now it's fiat, essentially backed by man hours. It's possible because the effect a strong dollar has on exports is only temporary, once the US economy deflates and consumer prices are adjusted to the new strength of the dollar, exports will no longer be affected. Other countries will find the products they once bought at a higher price on an inflated dollar will be offered at a lower price on a stronger dollar. The long term picture for a strong dollar is lower prices. It effects everything we know as consumers, but as a figure of speech re-writing textbooks isn't new to science, right. Whats the big deal with lower prices and a stronger dollar? We have borrowed a lot of money as a Country, and the fact is, if we want things to get done a little bit easier we need to borrow more. But I don't think I need to write that we simply can't afford to borrow, and borrow, and borrow anymore. Until we pay off the debt; to do that it's my understanding we need high interest rates and high interest rates make a strong dollar.
For a second lets just consider two pictures here: 1) the headlines read the USA slipped into another recession and interest rates are at 2%, or 2) interest rates are at an all time high of 10%. 10% is very high, and banks don't like high because it affects peoples ability to take out loans and pay back loans. Lets skip over to another fact of the matter here which is Banks, major banks are at the turn of the century, they need to change, embrace the revolution. Crypto was a bad scare, now companies are trying to startup offering 3% interest rates on savings accounts and checkings accounts for free (Robinhood). Why banks care at all about interest rates are beyond me, they should concern themselves as being some of the best investing firms in the world, focusing on making their money on HFTS and other highly aggressive, expensive, and profitable investing techniques other then relying on customers to take out loans and payback loans at 3%. Robinhoog is offering free checkings and savings because they know they can invest the money and make over 3%. Please give me some more time and I will write another thesis or expose on revolutionizing industries.
Back to the banks, the banks won't be happy with high interest rates, and honestly I think at the end of the day its a big part of the picture, imagine that every headline read, hawkish report, higher interest rates, hurray! I am prety sure that higher interest rates would be instore for the future, but when headlines become threathening, recesion, boo interest rates, well it's going to be tough to keep looking like the bad guy. What does the US economy have to work with here, a lot of debt, and a lot of rate hikes to get rid of it. Is that bad, no. Debt can kind of be like using nitro glycerin as a fuel to run ones car, if the engineer building the car had a high enough IQ, believe me it would certainly win the race. An intricate process of raising rates to pump the volatility in the stock market not in a tidal wave but to keep it consistently swinging will be a very profitable effect for options traders. It will also help conquer the balance sheet issue of 3+ trillion, and lower the cost of our goods.
Around 75 years ago a soda cost a nickel, that's about 3000% higher today, and the process to make and deliver the drink got easier. If we as a people don't start recognizing the real honest changes that need to happen, we're just not going to get it. How something can become more expensive but easier and easier to do, is as backwards as it gets. Why isn't soda free now that's its that much easier to produce? I don't even think they offer "free 24oz coke" under the cap any more. Oh that is chilling. What else can be done with interest rates? In general, get what we as a people want; strong economy, clear of debt, borrow more money, print more money, paper as gold, in theory a fiat currency can become more valuable then gold itself, lower consumer prices, a good feeling buying and selling stuff, honesty, reputation, global leadership. I am being as helpful as I can, the only solution is to be strong and get stronger. I wake up everyday, look myself in the mirror, and say the exact same thing. The only way to get through this is if we continue to get stronger. The Fed raised rates and terror struck the market collapsing our dollar, ouch. A stronger dollar and it still collapses. Is it because there was a lofty notion that was the last hike, I saw the headlines "raised rates" and bounced off the wall with excitement, or maybe that was the 1m timebomb that exploded the EURUSD 1m chart throwing me out of my chair. If you didn't look at the chart it jumped 20pips in one minute, then another 20 the next minute, I am sure your interest is peaked and your going to look at the 1m EURUSD. Aside from that upset, the dollar would not move lower because of a lofty notion before it moves higher on a factual action.
To conclude my thesis, I respectfully state there is a way to create a balance while increasing rates. Can it be done without considering the financial market, the global impact, and most importantly investing opportunity, absolutely not. Investing opportunity is the most important part of the economic pump. The economic pump is a concept surrounded by dollar velocity. Dollar velocity is the measure of a dollars circulation: example, bob makes a $1, buys a candy bar for a $1, the candy store owner buys lunch with the $1, the restaurant buys gas with $1, the gas station pays insurance with $1, the insurance company saves the $1, Bobs dollar had a velocity of 6, it changed hands 6 times effectively allowing the economy to continue transacting before being stored away in a savings account. Without investing opportunities money ends up in the bank with a theoretical velocity of 0. Velocity can kind of be considered the amount of times a dollar moves from one party to another, every time a trade happens it's increasing the velocity of the dollar and pumping the economy. Anytime anything is bought and sold, it's considered the process of the economic pump. Is it more effective to circulate goods, stock certificates, cash itself, contracts, etc.? In my opinion the most important part of the economic pump is that which has the largest opening for opportunity, the part of the pump that remains imeasurable. Investing opportunity provides a very aggressive velocity for the dollar, and it also offers an opporunity to make limitless wealth any time of the day, week, or year. Leaving you the reader with a short thesis on the importance of a strong dollar, and a way to formulate your own opinion as an individual. Thank you for your time, God Bless.
I feel compelled to address the US dollar, my publication is a thesis not an idea (I have already published an informal expose under the SP500 which I will attach below).
I remeber it was only about a decade ago a 24oz of soda cost $1.25 in the vending machine, the last time I bought a soda from a vending machine it cost about $1.75, and even at places like Walmart it's around $1.59 before tax. Our economy is inflated, I read in the news the other day that President Trump stated that a strong dollar is hurting the economy, and I imagine he is referring to the effect it has on exports. However I believe that a strong dollar is the future of the USA, I believe the USA is in business to make our dollar as valuable as gold, as good as gold. Our business is turning paper into gold. How could it be possible? The dollar was once backed by gold and now it's fiat, essentially backed by man hours. It's possible because the effect a strong dollar has on exports is only temporary, once the US economy deflates and consumer prices are adjusted to the new strength of the dollar, exports will no longer be affected. Other countries will find the products they once bought at a higher price on an inflated dollar will be offered at a lower price on a stronger dollar. The long term picture for a strong dollar is lower prices. It effects everything we know as consumers, but as a figure of speech re-writing textbooks isn't new to science, right. Whats the big deal with lower prices and a stronger dollar? We have borrowed a lot of money as a Country, and the fact is, if we want things to get done a little bit easier we need to borrow more. But I don't think I need to write that we simply can't afford to borrow, and borrow, and borrow anymore. Until we pay off the debt; to do that it's my understanding we need high interest rates and high interest rates make a strong dollar.
For a second lets just consider two pictures here: 1) the headlines read the USA slipped into another recession and interest rates are at 2%, or 2) interest rates are at an all time high of 10%. 10% is very high, and banks don't like high because it affects peoples ability to take out loans and pay back loans. Lets skip over to another fact of the matter here which is Banks, major banks are at the turn of the century, they need to change, embrace the revolution. Crypto was a bad scare, now companies are trying to startup offering 3% interest rates on savings accounts and checkings accounts for free (Robinhood). Why banks care at all about interest rates are beyond me, they should concern themselves as being some of the best investing firms in the world, focusing on making their money on HFTS and other highly aggressive, expensive, and profitable investing techniques other then relying on customers to take out loans and payback loans at 3%. Robinhoog is offering free checkings and savings because they know they can invest the money and make over 3%. Please give me some more time and I will write another thesis or expose on revolutionizing industries.
Back to the banks, the banks won't be happy with high interest rates, and honestly I think at the end of the day its a big part of the picture, imagine that every headline read, hawkish report, higher interest rates, hurray! I am prety sure that higher interest rates would be instore for the future, but when headlines become threathening, recesion, boo interest rates, well it's going to be tough to keep looking like the bad guy. What does the US economy have to work with here, a lot of debt, and a lot of rate hikes to get rid of it. Is that bad, no. Debt can kind of be like using nitro glycerin as a fuel to run ones car, if the engineer building the car had a high enough IQ, believe me it would certainly win the race. An intricate process of raising rates to pump the volatility in the stock market not in a tidal wave but to keep it consistently swinging will be a very profitable effect for options traders. It will also help conquer the balance sheet issue of 3+ trillion, and lower the cost of our goods.
Around 75 years ago a soda cost a nickel, that's about 3000% higher today, and the process to make and deliver the drink got easier. If we as a people don't start recognizing the real honest changes that need to happen, we're just not going to get it. How something can become more expensive but easier and easier to do, is as backwards as it gets. Why isn't soda free now that's its that much easier to produce? I don't even think they offer "free 24oz coke" under the cap any more. Oh that is chilling. What else can be done with interest rates? In general, get what we as a people want; strong economy, clear of debt, borrow more money, print more money, paper as gold, in theory a fiat currency can become more valuable then gold itself, lower consumer prices, a good feeling buying and selling stuff, honesty, reputation, global leadership. I am being as helpful as I can, the only solution is to be strong and get stronger. I wake up everyday, look myself in the mirror, and say the exact same thing. The only way to get through this is if we continue to get stronger. The Fed raised rates and terror struck the market collapsing our dollar, ouch. A stronger dollar and it still collapses. Is it because there was a lofty notion that was the last hike, I saw the headlines "raised rates" and bounced off the wall with excitement, or maybe that was the 1m timebomb that exploded the EURUSD 1m chart throwing me out of my chair. If you didn't look at the chart it jumped 20pips in one minute, then another 20 the next minute, I am sure your interest is peaked and your going to look at the 1m EURUSD. Aside from that upset, the dollar would not move lower because of a lofty notion before it moves higher on a factual action.
To conclude my thesis, I respectfully state there is a way to create a balance while increasing rates. Can it be done without considering the financial market, the global impact, and most importantly investing opportunity, absolutely not. Investing opportunity is the most important part of the economic pump. The economic pump is a concept surrounded by dollar velocity. Dollar velocity is the measure of a dollars circulation: example, bob makes a $1, buys a candy bar for a $1, the candy store owner buys lunch with the $1, the restaurant buys gas with $1, the gas station pays insurance with $1, the insurance company saves the $1, Bobs dollar had a velocity of 6, it changed hands 6 times effectively allowing the economy to continue transacting before being stored away in a savings account. Without investing opportunities money ends up in the bank with a theoretical velocity of 0. Velocity can kind of be considered the amount of times a dollar moves from one party to another, every time a trade happens it's increasing the velocity of the dollar and pumping the economy. Anytime anything is bought and sold, it's considered the process of the economic pump. Is it more effective to circulate goods, stock certificates, cash itself, contracts, etc.? In my opinion the most important part of the economic pump is that which has the largest opening for opportunity, the part of the pump that remains imeasurable. Investing opportunity provides a very aggressive velocity for the dollar, and it also offers an opporunity to make limitless wealth any time of the day, week, or year. Leaving you the reader with a short thesis on the importance of a strong dollar, and a way to formulate your own opinion as an individual. Thank you for your time, God Bless.
Related Ideas
Cool the flames
TradeTerror
about SPY