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Originally Posted by tabs
Very eloquently put...you could be a Biden econ adviser...
According to FRED....the Velocity of money slid down a cliff in 08 and never recovered... and fell off a cliff in 20 and has stayed there, at the beginning of 2022 the V was at 1.14 and with inflation is a stellar 1.19 on 11/30/22...so all of this inflation has resulted in a 0.05 increase in the velocity of money...the earth is trembling with anticipation of a robust econ with that one..
I want some of what JYL is smoking.
Money has become ever more stagnant since 08...more USD applied has not moved the needle...Money is hardly moving...
Now that the FED is taking money off the table what is going to prop up the econ? They delayed taking it off for as long as they could...but were forced to raise rates...and decrease the Balance sheet because........the USD and Bonds had lost credibility globally.
As Walmart has explained their revenues are up, but electronics, sports equip, apparel prices are declining because of excess inventory...it is not selling... low margin stuff like food and essentials is what is driving Walmarts revenues.. so you are seeing DEMAND DESTRUCTION for consumer goods while food etc is still in inflation mode...
The American consumer is using the credit card to make ends meet and NO LONGER HAS THE DISCRETIONARY INCOME TO BUY STUFF..that means factory jobs are going to be lost...and no job means no money to buy food.
That is why China is in big dodo...and is probably why you have not heard about Taiwan lately.
The shipping rates from China for Sept were down 90% to the west coast and 78% to the est coast...year over year...that means less ships with less stuff on board...no one is buying..
I would think that there are going to be some wicked sales after the holidays as retailers are gona want to move the merch real bad.. after the merch is moved it won't be replaced with as much...empty shelf space..and if that new merch doesn't move...that means the Chinese guy aint gotta job no more..
The age of ABUNDANCE and seeming prosperity is over, gone, done, Kaput. Now it is a grm reality of down to the bone..
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That seems like a sound analysis to me.
The scenario where simply raising interest rates for a few months is going to make what has been done in the past 3 years “go away” - that doesn’t seem plausible.