Recession is upon us - disastrous economic data

[TH3]

2 hours ago, The Frankish Reich said:

I would be willing to wager that in 20 years these Haitian families and their children will be better educated and have higher earnings than their native Springfield OH counterparts. 

You know who used to understand this? The JD Vance of Hillbilly Elegy days. The white trash cukture is far more of a problem than the Haitian immigrant culture. 

Well said and completely accurate

[Tommy Callahan]

 

[Tommy Callahan]

“The US economy is in a good place and our decision today is designed to keep it there,” said Fed Chair Pay Powell during the press conference.

 

Logical

 

The old mandates of 2% inflation and full employment are out the window.

 

 

[All_Pro_Bills]

16 hours ago, Roundybout said:

He tripled the national deficit my guy 

There's the national debt and the annual budget deficit.

 

Trump did not triple the national debt. In 2016 it was $19.5T, in 2020 it was $26.9T, in 2023 it was $32.2T. In 2024 its been reported to have exceeded $35T.

 

https://www.nytimes.com/2024/07/29/us/politics/national-debt-35-trillion.html#:~:text=America’s gross national debt topped %2435 trillion for,its daily report detailing the nation’s balance sheet.

 

2016 to 2020 up $7.4T

2020 to 2024 up $8.1T  (final numbers projected higher)

 

Trump's administration did a poor job managing the country's finances but the COVID outbreak and lock downs were contributing factors.

Biden's administration is doing worse during what we're constantly told is a wonderful economy. But looking under the covers its what economists have call bifurcated. Two layers. People owning assets like stocks and real estate are fairing well while those without such assets or too young to have begun to accumulate sizable savings and investment funds are feeling the consequences of a poorly performing consumer along with inflation.

 

Both candidates have said next to nothing about getting the national debt under control. They offer tax cuts without explaining the source of funds (they will borrow) for increased spending. The ever popular more taxes on the rich will not bring the debt or annual deficits under control. They're just going to spend more.

 

A Trump administration would add to the national debt but Harris will be worse. Already under Biden they're adding almost a trillion every 100 days. Extrapolating that rate, which I expect will be higher under Harris, out 4 years its over $14 trillion in new debt. So it goes from $35 in 2024 to almost (and probably over) $50 trillion in 2028.

 

The annual interest will be something like $2 trillion (its over $1 trillion now) and what do you think is going to happen to the purchasing power of all those dollars you hold in your 401K? If people think the increase in prices under Biden's inflation was bad just wait. They ain't seen nothing yet. You're going to need $50 to buy a "value" meal at McDonald's.

 

Please don't pretend Trump will be ruinous and Harris will be hearts and flowers with constant sunshine.

 

Edited September 19 by All_Pro_Bills

[mjd1001]

2 hours ago, Tommy Callahan said:

“The US economy is in a good place and our decision today is designed to keep it there,” said Fed Chair Pay Powell during the press conference.

 

Logical

 

The old mandates of 2% inflation and full employment are out the window.

 

 

I posted this in another thread here but it might be appropriate to post it here:

 

 

"Interest rates slashed to help economy

Fed's dramatic action lowers target on key short-term rate for the first time in 4 years - to 4.75% - and signals more cuts could be coming.

By Paul R. La Monica, CNNMoney.com editor at large

September 18  5:03 PM EDT

 

NEW YORK (CNNMoney.com) -- The Federal Reserve cut the target on a key short-term interest rate by half of a percentage point Tuesday to 4.75%"

 

 

That article is not from yesterday, it is from 2007. https://money.cnn.com/2007/09/18/news/economy/fed_rates/index.htm

 

Seem famaliar?

[All_Pro_Bills]

33 minutes ago, mjd1001 said:

I posted this in another thread here but it might be appropriate to post it here:

 

 

"Interest rates slashed to help economy

Fed's dramatic action lowers target on key short-term rate for the first time in 4 years - to 4.75% - and signals more cuts could be coming.

By Paul R. La Monica, CNNMoney.com editor at large

September 18  5:03 PM EDT

 

NEW YORK (CNNMoney.com) -- The Federal Reserve cut the target on a key short-term interest rate by half of a percentage point Tuesday to 4.75%"

 

 

That article is not from yesterday, it is from 2007. https://money.cnn.com/2007/09/18/news/economy/fed_rates/index.htm

 

Seem famaliar?

How about "Fed lowers rates fifty basis points as housing prices and stock market indexes reach all time highs fueled by speculation of future rate cut decisions. Inflation to re-accelerate later this year".

[Starr-Bills]

Nothing to see here.

 

[ChiGoose]

7 hours ago, mjd1001 said:

I posted this in another thread here but it might be appropriate to post it here:

 

 

"Interest rates slashed to help economy

Fed's dramatic action lowers target on key short-term rate for the first time in 4 years - to 4.75% - and signals more cuts could be coming.

By Paul R. La Monica, CNNMoney.com editor at large

September 18  5:03 PM EDT

 

NEW YORK (CNNMoney.com) -- The Federal Reserve cut the target on a key short-term interest rate by half of a percentage point Tuesday to 4.75%"

 

 

That article is not from yesterday, it is from 2007. https://money.cnn.com/2007/09/18/news/economy/fed_rates/index.htm

 

Seem famaliar?

 

While it's true that interest rate cuts are often done to help an ailing economy, they are also done once inflation has been defeated due to previous rate hikes.

 

As inflation became more and more of a problem, the Fed kept raising rates. Inflation is now at target, so they're bringing the rates back down.

[The Frankish Reich]

15 hours ago, Tommy Callahan said:

“The US economy is in a good place and our decision today is designed to keep it there,” said Fed Chair Pay Powell during the press conference.

 

Logical

 

The old mandates of 2% inflation and full employment are out the window.

 

 

We are moving toward the 2% target.

"full employment" has generally been considered to be an unemployment rate of 4% or lower.

Win.

[All_Pro_Bills]

14 hours ago, ChiGoose said:

 

While it's true that interest rate cuts are often done to help an ailing economy, they are also done once inflation has been defeated due to previous rate hikes.

 

As inflation became more and more of a problem, the Fed kept raising rates. Inflation is now at target, so they're bringing the rates back down.

The expectation is the Fed will cut a couple more times but i expect inflation will re-accelerate quickly.

The dilemma is that monetary policy can only be so effective when the real problem is fiscal policy. You can't run quarterly fiscal deficits close to 1 trillion dollars provided through borrowing and expect no consequences.

Add in the demand for dollars and Treasury bonds from other central banks for reserve purposes is being replaced at a noticeable rate by gold purchases and you've got a dollar over-supply issues. The law of supply and demand translates to a lower dollar. Less purchasing power, more inflation. And while most trade settlement is still in dollars and faces no immediate threat from the BRICS or anywhere else that demand is slowly eroding via bilateral trade deals settled in local currencies.

The long and short is all these dollars created by government borrowing have in the past found a home outside of the US economy to avoid domestic inflation and that foriegn demand is clearly shrinking.

 

[Tommy Callahan]

This is showing the fed to be partisan.  

 

Not independent as it's supposed to be

 

Wall Street loves this news 

 

It's gonna hurt the folks already struggling. 

Edited September 20 by Tommy Callahan

[ChiGoose]

1 hour ago, All_Pro_Bills said:

The expectation is the Fed will cut a couple more times but i expect inflation will re-accelerate quickly.

The dilemma is that monetary policy can only be so effective when the real problem is fiscal policy. You can't run quarterly fiscal deficits close to 1 trillion dollars provided through borrowing and expect no consequences.

Add in the demand for dollars and Treasury bonds from other central banks for reserve purposes is being replaced at a noticeable rate by gold purchases and you've got a dollar over-supply issues. The law of supply and demand translates to a lower dollar. Less purchasing power, more inflation. And while most trade settlement is still in dollars and faces no immediate threat from the BRICS or anywhere else that demand is slowly eroding via bilateral trade deals settled in local currencies.

The long and short is all these dollars created by government borrowing have in the past found a home outside of the US economy to avoid domestic inflation and that foriegn demand is clearly shrinking.

 

This might be more convincing if the recent bout of inflation was due to fiscal policy instead of supply shocks from the world’s transition away from the COVID economy. 

[SectionC3]

39 minutes ago, Tommy Callahan said:

This is showing the fed to be partisan.  

 

Not independent as it's supposed to be

 

Wall Street loves this news 

 

It's gonna hurt the folks already struggling. 

And yet you vote republican.  Give Terry pegula the big tax break, you say!  It will trickle down to me, you say!   Everyone knows it’s a hoax except for you. 

[ChiGoose]

Economists: The Fed is expected to cut rates this year

 

The Fed: We are cutting rates

 

MAGA: IT'S ALL RIGGED! THE FED IS IN THE HANDS OF THE DEMS!

 

Economists: The Fed cutting rates will bring down the costs of borrowing money and increase consumer spending.

 

MAGA: THIS IS GOING TO HURT THE LITTLE GUY. SOMEHOW. DON'T ASK ME. BUT IT'S GOOD FOR PEOPLE I DON'T LIKE SO IT MUST BE BAD!

[Pokebball]

16 hours ago, ChiGoose said:

 

While it's true that interest rate cuts are often done to help an ailing economy, they are also done once inflation has been defeated due to previous rate hikes.

 

As inflation became more and more of a problem, the Fed kept raising rates. Inflation is now at target, so they're bringing the rates back down.

The target is 2%. Has another "definition" been changed?

[ChiGoose]

1 minute ago, Pokebball said:

The target is 2%. Has another "definition" been changed?

 

It's currently 2.5% and it's been trending down for a while. Effects can be lagging, so they don't wait until the moment it hits 2% if they are confident it's going there anyway.

[sherpa]

47 minutes ago, ChiGoose said:

This might be more convincing if the recent bout of inflation was due to fiscal policy instead of supply shocks from the world’s transition away from the COVID economy. 

 

Please.

 

The recent bout of inflation, about 20% since 2020 was due to over stimulus excused by covid. It was necessary to stimulate, but the last one was ill advised.

Much more money chasing the same production results in higher prices, and a good deal of that money has entered capital and stock markets, as always.

 

The argument that it was due to supply shock is specious. That black swan existed for a bit, but having returned to normal, if that was the case prices would lower as supply chain issues resolved.

 

Same thing happens in the energy market all the time. Hurricanes, refinery issues, middle east turmoil etc cause a brief spike in prices. Once those individual issues are resolved, prices fall to normal supply/demand levels.

 

The point is that the inflation we are now paying for was do to over supply of money and bad fiscal policy. Not supply chain problems which, largely, no longer exist.

[Coffeesforclosers]

4 minutes ago, sherpa said:

 

Please.

 

The recent bout of inflation, about 20% since 2020 was due to over stimulus excused by covid. It was necessary to stimulate, but the last one was ill advised.

Much more money chasing the same production results in higher prices, and a good deal of that money has entered capital and stock markets, as always.

 

The argument that it was due to supply shock is specious. That black swan existed for a bit, but having returned to normal, if that was the case prices would lower as supply chain issues resolved.

 

Same thing happens in the energy market all the time. Hurricanes, refinery issues, middle east turmoil etc cause a brief spike in prices. Once those individual issues are resolved, prices fall to normal supply/demand levels.

 

The point is that the inflation we are now paying for was do to over supply of money and bad fiscal policy. Not supply chain problems which, largely, no longer exist.

 

So how do we fix inflation using tariffs and tax cuts? Honest question.

[ChiGoose]

7 minutes ago, sherpa said:

 

Please.

 

The recent bout of inflation, about 20% since 2020 was due to over stimulus excused by covid. It was necessary to stimulate, but the last one was ill advised.

Much more money chasing the same production results in higher prices, and a good deal of that money has entered capital and stock markets, as always.

 

The argument that it was due to supply shock is specious. That black swan existed for a bit, but having returned to normal, if that was the case prices would lower as supply chain issues resolved.

 

Same thing happens in the energy market all the time. Hurricanes, refinery issues, middle east turmoil etc cause a brief spike in prices. Once those individual issues are resolved, prices fall to normal supply/demand levels.

 

The point is that the inflation we are now paying for was do to over supply of money and bad fiscal policy. Not supply chain problems which, largely, no longer exist.

 

So the inflation around the globe was caused specifically by the last stimulus in the US?

 

The US did a bunch of stimulus, but those were fine. But then they did just one too many and it plunged the world into inflation?

[sherpa]

2 minutes ago, Coffeesforclosers said:

 

So how do we fix inflation using tariffs and tax cuts? Honest question.

 

Tariffs nor tax cuts are an inflation fix.

They have their own reasons for efficacy.

 

Inflation is solved by sound fiscal and monetary policy.

 

Certainly, the absolute dumbest ideas come from those trying to buy votes  ie., a $25k "award" to first time home buyers, or forgiving student loans.

Those are idiotic.

 

The way you "fix" inflation," which is nothing more complicated than a diminishing of the currency value vis a vis a product, is to stop printing money at ridiculous rates, or upsetting market dynamics by throwing money at "preferred" products.