What I am wondering is what will be the consequence of current huge money printing and borrowing? Why the market doesn't demand higher long term interest rate due to inflation worry?
The consequence of pandemic financial stimulus
- Thread starter CoolTrader
- Start date
That's a great question. We're in a deflationary period. My guess is stagflation. Dow 100k with avg employees paid 10% less
Because they just kick the can down the road again.
At some point, no-one knows when, the shit will hit the fan
Honestly with the $ so strong and us controlling the printing press with strong $'s no consequences at this time . Interest rates at or near zero so very little to pay back on interest only . The consequences are down the line if people get scared of all the debt and depend higher and higher rates for the risk and that happens if the $ declines big. Then it shows up in $6 milk and $12 for a meal at mcdonalds . But on the other side asset prices will rise to dry to outrun the rise in prices causing a vicious spiral up of all prices . But 10's of millions more people will slip into poverty as their wage increases don't keep up with rising prices . At that pt due to inflation the fed will have no juice but to jack rates up big to help the collapsing $. But until that to its party on .
This article can shed some light on the issue. I didn't see it when I started the thread.
https://www.marketwatch.com/story/c...s-for-the-us-economy-2020-05-19?mod=home-page
https://www.marketwatch.com/story/c...s-for-the-us-economy-2020-05-19?mod=home-page