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They talked about possibly raising rates in 2023. In my opinion, they're bluffing. They can't do what Paul Volcker did in the 80s and raise rates to stave off i
by chrisco255 5y ago
They talked about possibly raising rates in 2023. In my opinion, they're bluffing. They can't do what Paul Volcker did in the 80s and raise rates to stave off inflation without crashing the stock and real estate markets deeply. They can't raise rates without triggering a deep, deep recession and taking everyone's retirement fund out with it.
- refurb 5y agoYour assumption is they can keep rates low while inflation goes wild. That’s not an option either.
- MattGaiser 5y agoWild? No. 3-5% a year? I think that would be very doable.
- chrisco255 5y agoI think they've run out of options and are between a rock and a hard place.
- arcturus17 5y ago> without crashing the stock and real estate markets deeply And, perhaps more immediately, without paying abhorrent interests on public debt?
- imtringued 5y agoWe are talking about inflation causing an increase in interest rates. Public debt is not a problem in this scenario because the real interest rate doesn't change that much. However, inflation will kill the bank accounts of rich corporations and encourage them to invest their money.
- imtringued 5y agoThat's why you should have inflation every year instead of concentrating 20 years of inflation into one. (what you get when you do the deflation thing) In practice rates will be raised but but carefully enough that we still end up with 0% real interest.
- rdtwo 5y agoAren’t real rates like -2% right now?