Credit Bubble As long as you can say that you can power soil solar panels with the brain waves that let you lobotomize. Seems like this transcends GDP, bubbles and crybabies. He’s doing harm to homeowners as well.When the public unions with their depleted pension funds sees home prices rising they will send out the local assessor to revalue your house. I would only add/suggest that, as mentioned earlier in this thread, it might be better for all of us (except the banksters,) if banks did not exist, and were replaced by credit union type of facilities for storage and safe transfer of ”money.” Is that some sort of joke or did somebody actually say that? Most new jobs are on minimum wage or a dollar above. Like ” fell x% after their earnings disappointed. Companies have no need to pay more because of supply and demand and the employees accept it knowing that their wages will be made up with “universal tax credits”; free money for housing and living on. Powell: we don’t think there is any relationship between low interest rates and asset prices, investors are bidding up asset prices in response to vaccine success. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2690298/. ‘inflation and economic growth will make their balance sheet smaller over the years relative to the economy’. Jingle mail starts again & the system collapses. Who wants to continue paying on a $mil mortgage now worth half that? Step3. Whatever crying seems to be filling the nursery now, it’s worth noting that the 2-yr Treasury is at 0.11% today, lower than its ever been. Europe’s Dilemmas used to fight crises and prevent  panics, like in 2008. The Federal Reserve is casting a long shadow over the world’s biggest bond market, derailing a classic recovery trade and underscoring how an era of central-bank intervention will reverberate for some time to come. And this expectation by itself already works as a kind of backstop. It seems like “crybabies on wall street”, is the meme of the day. But we would appreciate if you summarize your article in few simple sentences together with expected impact it is likely, possible to have on the market. So, Nancy and Joe, understand the 1 Trillion, the 2.2 Trillion, etc…the “small integer game” is a dangerous one. What about GameStop?   It's crucial to remember that yields go down when there is a lot of demand for the bonds. I drew the blue line across. As the M2 increses (money printing) increases to finance the growing deficit/DEBT, growth suffers along with decrased velocity of money. our economic models simply assumed that banks did not exist:”. The only route they then have left is raising interest rates and draining liquidity from the system. The net effect is no good. We have minimum wage in the UK that is currently £8.72 (US$11.78). But Goldman Sachs Group Inc. has shifted to a more nuanced view, targeting a steeper curve via forward contracts instead of spot positions. Buying more Treasuries (i.e. The Fed has acknowledged that. /s. When inflation expectations increase and hence yields for longer maturities rise, the way the central bank drives yields for these long maturities down is by raising interest rates. Also, nobody expects the Fed to raise rates in the near future, so this pins short term rates to the ground. A great post Chewer, ESPECIALLY the cat analogy. And you’re expected to pay for it all with a $15 per hour job. Transportation That’s very subjective and not sure why it might go much higher. Average new car prices are north of $35k. Try doing DIY work on your house while holding a smart phone in your left hand and having to give some likes on your FaceBook account all day. They have no choice but to keep interest rates low and continue the Ponzi scheme. They have benefited some, and crushed others. Property shot up in the UK in the early 2000’s in the UK because a few banks were offering 120% mortgages. The debt wheels under their fiat wagon however are wobbly. Certainly, we are the most liquid, Chairman Powell take a bow. That’s why Art and artists are needed, even the often despised Basket Weaving 101. Step1. Any Corporate or Muni Bonds on the Fed’s balance sheet? There still needs to be an elite to lead them. The most common monetary policy tool in the U.S. is open market operations.These take place when the central bank sells or buys U.S. Treasury bonds in order to influence the quantity of bank reserves and the level of interest rates. In my opinion, the Fed has set a precedent with the Corporate Credit Facility SPFs: PMCCF and SMCCF. Some bond guys think they will raise the IOER rate before the March FOMC meeting. Don’t get me wrong it could happen and I hope it does just stop the scam. We’re well on our way towards the same fate as Weimer Germany. See what happens. The steepener is “definitely a position that everyone loves,” Anderson says, but there’s a lot at stake over the next few weeks. What else could it be. Therefore, I see a substantial tail risk for much higher yield increases than most people are now anticipating. Debt that cannot be paid off, will not be paid off. We’ve got homelessness on steroids, bubbles in every single asset class and beyond, and the fissures are showing up everywhere. So, you would get a situation that is the opposite from the past decade: higher CPI inflation, rising rates and deflation in asset prices. But because it will be so obvious to everybody, it can easily trigger a spiral that then starts feeding on itself. There are certain markets that can make that turn pretty smoothly, like housing?The real question: rising rates imply tight credit, can the economy tolerate a reduction? If that happens, it would cause longer maturities to outperform, creating an opportunity to put on more bear-steepener trades from a better level, he says. Instead, it’s edged lower every time it’s come close to that level since March, dragged down by traders worried the Fed could adjust its bond purchases as soon as its Dec. 16 policy decision. It’s worked well for them, so far. And it has been adding to its pile of Mortgage Backed Securities (MBS). The the super rich wait to pick up even more assets at reduced (deflated) prices. Make a lot of money. Any business that can’t pay that wage deserves to go out of business. Reporter: Are there any plans to recuse herself from advising the President on GameStop and Robinhood situation? Sure there is – Gamestop. When they are talking about different subjects (ie subjects other than the effects of low interest rates), they must occasionally allude to the true reality of market distortions (in passing) without openly saying it in order to explain various realities. Hahaha… I mean, who isn’t paying $1.1 million for a $1 million house because you might get a vaccine in the next 3-9 months that might allow you to resume pre-pandemic life to a small degree. The potential for damage to bond holders in the secondary market is the dollar. This is what a zombie economy looks like. So the Fed still has 140billion of SPV assets on its balance sheet. Without reference to any individual, the lack of patient public contemplation, and especially complete public participation of such changes is and will continue to be a shame on and for all the parties concerned. But of course that goes against their philosophy of economic growth driven by binging on credit so it’s not going to happen. Step3. 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