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we can listen and learn.
Well folks, looks like they're softening the landing...
Indeed, the FED and the government are finally doing a few sensible things to help soften the landing of our economy. Trying to lower mortgage rates is a good thing. Banks don't like it, and it will bite them (and us) later, but for now, it helps a lot. Domestic spending is also a very good thing, as it puts dollars back into the hands of the workers and soaks up a little bit of unemployment as well. Just a few minor problems...
First problem is with lowering mortgage rates. This lowers the bar, the inflation bar, for the banks. They will be even less tolerant to inflation because any inflation over the average mortgage rate is really a net loss. They won't let that happen. This means, that the FED will really smash down hard when/if the economy starts to recover and commodity and oil prices rear their ugly heads again. Has to happen. Nothing has changed as far as increased supply of either oil or commodities. For now though, go ahead and lock in that lower rate! I will be too, I hope, if they let me.
Nothing actually wrong with domestic spending and middle class tax cuts. The problem is that its all being done as pure debt. You're not creating more debt, so the government is creating it for you. If we didn't already have such a massive national debt, then this wouldn't be so much of a problem. Difficulty will be, again, if/when we start to recover. As inflation starts again, treasury rates will climb. When treasury rates climb, they eat up more of the federal budget. So, again, the FED has reason to clamp down hard on the least little hint of inflation.
Just what is so bad about the FED clamping down on inflation? Normally, nothing. Except that this isn't really inflation. It's competition for resources. Oil and commodities skyrocketed because there was demand. Wages didn't go up hand-in-hand, which means it isn't inflation. Demand went up because China, who we've been handing out dollars to, has grown significantly. We are now in competition over resources with a country roughly three times our size.
So, if oil and commodity prices start going up, and the FED clamps down on us to keep the prices down, then who wins? Not us, obviously. China wins. Duh.They can, and will, just happily keep on expanding and growing, knowing full well that we have forced ourselves into a corner and have no choice but to crush our own economy to keep inflation down. Banks loathe inflation, remember? That, and we won't be able to fund our own national debt if we let inflation take off. We have too much short-term debt that will roll over almost instantly at higher rates.
So folks, your government has hosed itself, and you. No surprise there.
The hole they've dug is too deep. It is not possible for them to climb out.
This is, in fact, the best that your life will be. Its all downhill from here.
Sorry about that, but you voted for them.
And again... I can fix it.
I know how.
I am free to do so.
It's really not that difficult if you are not bound by greed.
Do you want a better life, or not?
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