Quote:
Originally Posted by ASAP
we are in stagflation... just no one wants to admit it... gdp is growing only in some sectors, inflation is still flying and layoffs are happening everywhere...
the only fix that I am aware of is to completely flush the cash out of the system... that can only be done by raising rates again OR raising taxes... no one seems to want to do that for fear of crippling employment and the fake stock market gains... not sure where we go from here
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Yeah, that is the place the powers that be will not go, for sure, as it is the absolute worst possible scenario. But it appears we are there.
Higher-for-longer, or even higher-than-higher-for-longer, is the only solution. That will ultimately flush the money out as paper losses (in CRE, for example) turn into real ones, the government's ability to endlessly line people's pockets to buy their votes will be limited, and businesses will scale back spending further. But, so much economic activity is consumption-based now there is really only one thing that will kill the beast; unemployment. Several million people need to lose their jobs, unfortunately. Not sure when it will happen, but it will if interest rates remain here (or go even higher).