US Fed Funds Rate Hike is just Lipstick on a Pig, correct? They say that it is going up "to curb inflation due to booming economy"... Me thinks this is a whole load of bull $hit. The real reason is that they have sold so much debt that the trading price of their debt has fallen below the par value (meaning that the yield to maturity (YTM) has inflated/ increased) such that the inflated market place YTM forces US FED to increase the coupon (interest) rate to raise more $$$. The only thing that has inflated is the garbage amount of USD debt, only matched in amount by the amount of garbage USD circulation resulting in an aversion to any currency/ debt related to the US FED internationally. The hand of the USA FED is forced and it has NO CHOICE but to increase coupon rate to make every new debt issuance more attractive than the last to continue its corrupt , ponzi business as usual charade to fund ordinary gahmen operating expenses, its massive external trade deficit, trouble making activities across the world and an ever increasing internal security budget and welfare costs to prevent tipping over to another civil war (dis happens when everyone owns an M16 military assault weapon, is hungry and has a sick child at home). The U.S. gahmen is as addicted to debt as a drug addict is addicted to his quick fix and will lie and steal just to afford another packet of weed (or whatever is his fix). Thus, the U.S. gohmen is just cooking up an elaborate sounding FAKE NEWS that economy is booming and other bullsh!t c®app like "curb inflation due to awesome, booming economy" when all it actually wants is extra $$$ to spend on social welfare costs, operate its over flowing prisons, buying votes and sending its stupid army and aircraft carriers to cause trouble and start wars around the world (just so that they can increase sales of their military weapons production industry which makes up a substantial part of their economy). In short, they are just running on unethical / ponzi / hostile economics and bulsh!tting everyone else just to raise more $$$ for their shenanigans and other un-diplomatic, unethical and morally bankrupt activities across the world.
Seems folks at Fed are 100-500 times smarter than you. Sorry. For you I would say count Iphone sales or auto sales as good indicator of how economy is doing.
I read that U.S. treasury yields are increasing and think that the real reason is poor investor demand, not anticipation of FED interest rate rise. In any case, apple has recently cut its i-phone production orders anticipating lower sales moving forward. In any case, sooner or later, the truth will be out. If they don't raise interest rates above or equal market rate YTM, then nobody will lend them new money meaning insufficient $ for domestic gahmen spending or worse, inability to redeem existing bonds due. Increasing interest rates pre-emptively, if resulting in job cuts can be a can of worms in USA since I mentioned that a hungry, desperate man with an M16 gun and sick, dying kid is quite a pickle to handle. Lets see, time will tell, but I still think that my analysis is correct.
I see no analysis??? an 11 year slow progression to 97% employment, stock highs, and everyone with latest Iphone super computers in their pockets certainly does not foreshadow significant economic problems on the horizon.
Iirc, unemployment figures are only based upon persons LOOKING for a job; those who have given up looking due to sickness, depression, resignition, living off debt, have sub-optimal employment e.g. minimal part-time work, unprofitably self-employed, enrolled in education institutions, in prison etc are excluded when calculating employment figures. Employment figures are thus an UNRELIABLE contributor to decent general economic analysis. Stock highs in international MNC companies in no way reflect the financial health of the USA gahmen. Much of the corporate wealth as I understand is parked and invested off shore (tax heaven places) and only pays minimal US taxes, thus the very high U.S. gahmen debt. The subprime mortgage financial crisis showed how jobless people could buy big houses with zero downpayment for large housing loans... probably the same thing is happening with their credit card spending (/ free $$$ vz gahmen welfare schemes/ jobless payments): thus the ability to afford expensive gadgets. Once they hit their credit limit, their credit cards are suspended, thus Apple inc cutting back on its iphone order shipments because it knows that people cannot afford to buy any more.
Whilst on paper, the Treasury (Secretary is appointed by president n can be replaced anytime) and FED (chairmen appointed by president but cannot be fired anytime) are separate entities, they are very much peas in the same pod. Outcome is still the same wrt debt coupon rates moving forwards. Any excess supply of anything including treasury bonds aka gahmen debt will cause the market price to fall due to uncompetitive (low) bid prices meaning increased yield to maturity (YTM) which the treasury must match in coupon (interest) rates in order to successfully borrow whatever amount of USD it needs to the U.S. gahmen operating expenses. If there is insufficient treasuries (us gahmen bonds) in the market and the demand from pension and sovereign funds is high, then the dog (treasury) is wagging the tail (coupon / interest rate ); but if there is a big excess of 20, 30year to maturity treasury bills for sale/ being dumped on open market by current holders because of excess holdings, ponzi scheme being revealed, aversion to USD, bad reputation of U.S. gahmen, etc etc, the it is the case of tail wagging the dog, i.e. the treasury is like a desperate drug addict (addicted to debt) and can no longer control the interest rate which is much more so determined by the YTM of its bonds in open market and must thus keep increasing the coupon rate of newly issued bonds to achieve target U.S. treasury bond sales. This will sustain itself for a while until the true ponzi nature of the U.S. Treasury comes to light and then the entire con business goes bankrupt (like the USSR, split up into component states/ civil war erupts).
The reason the interest rates went so low was because it was the Fed buying U.S. debt instead of lenders in the private sector. Of course they can't keep doing that without it causing inflation (which in turn drives interest rates up).
totally wrong of course. there are many different measures of unemployment that take into account many different aspects of the problem and they are all moving in a positive direction. Do you understand now?
absurd of course all signs are far better than ever now: GDP, employment, Iphone/car sales, stock market are all good. And, Fed is more educated and experienced than ever in American history on how to manage monetary policy.
I think that your analysis is basically correct............ but........ another part of this is the beginning of OPTIMISM replacing the PESSIMISM...... of the Obama Era! Could a real estate boom plus better Fed policy pay off USA national debt? Eighty percent of the people who run Wall Street are happier and more optimistic with The Donald as President than they were with President Obama........ and they are expecting a surge...... somewhere...... I believe it will be felt most in real estate prices of land within a hundred miles of major USA cities......... exactly as shown to a Pastor David Wilkerson..... back in 1973..... in some sort of experience that he felt was supernatural.
absurd of course all signs are far better than ever now: GDP, employment, Iphone/car sales, stock market are all good. And, Fed is more educated and experienced than ever in American history on how to manage monetary policy.
